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Falling commercial property values, unpaid taxes blamed for tax rate hike

November 16, 2011
GORHAM A big jump in the tax rate — $2.85 per thousand of property valuation or nearly 12 percent has left many residents shaking their heads and a few shaking their fists, with everyone wondering why.

"Our budget isn't going up," Gorham Town Manager Robin Frost said. "Our revenues are going down."

Gorham's loss of revenue is part of the story. The poor economy wiped away $10 million in real estate valuation and Tropical Storm Irene destroyed infrastructure, costing the town $76,500 in emergency funds. While the federal government will eventually reimburse the town for most of that, it will take an improved real estate market to bring the valuation back up.

During the heyday of a few years ago, Gorham enjoyed the revenue of a booming retail and commercial market, but as success slipped away so did the tax revenue that once filled the town's coffers. Now, several large commercial properties along the Berlin-Gorham Road and on Main Street sit vacant, and the taxes they pay — if indeed the owners can pay them have sharply declined. The town has seen a "two-thirds change in assessment in commercial properties," Frost said.

Two large commercial taxpayers with multiple properties Munce's Superior Petroleum Products and Currier Trucking owe the town $460,000 in back taxes. Munce's owes $237,165, and Currier Trucking, $222,964.

This tax debt has been at the center of hot dispute. In previous years, the town was able to count unpaid taxes as an asset so it would not have to increase taxes to fill the hole, but no longer. The town's auditor is requiring that the $460,000 be placed in a reserve fund in case the back taxes are not paid. Rob Munce of Munce's Superior Petroleum Products said that he doubts the town will receive the full amount. Identifying two struggling taxpayers and in essence blaming them for the tax hike — has created hard feelings. Munce said the town is wrong to blame them for the tax rate hike. "We're in Chapter 11," he said. "For them to claim it's because of our company is ludicrous."

Munce said an independent management company appointed by the Bankruptcy Court is running his family's companies and 13 properties. "Even if we wanted (to pay the taxes) we can't," he said.

Gorham's tax rate went from $23.95 in 2010 to $26.80 in 2011. This breaks out to be $11.21 to the town $9.58 to the local school; $2.29 to state education, and $3.72 to the county. Meanwhile the town's department heads will be asked to find places to cut, and Munces hopes to put the bankruptcy proceedings behind them and to return to their original business delivering fuel.

Martin Lord Osman
Salmon Press
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