How has the economic downturn affected the municipal budgets of three Penobscot Bay island communities?
So far, not badly, say town managers in Vinalhaven, North Haven, and Islesboro. Housing starts, excise taxes, property tax payment, appeals for general assistance, and local business activity are all indicators of economic weakness, and so far, nothing dramatic has shown up. There are, however, hints of trouble to come.
Of course island lobstermen are still reeling from the collapse of boat prices back in October.
Marnie Diffin, town manager for Islesboro, noted that off-setting revenues had declined abruptly this fall. Earnings dropped by half on the town’s money market account where tax money earns interest until disbursed, and she expects the selectmen will have to shift funds to compensate for the decline. With the recent assumption of considerable debt for paying for a new school, Diffin said the town might have to borrow to meet cash flow needs.
North Haven’s Joseph Stone said that their town budget had been conceived in less turbulent times but he expected the selectmen will base the next budget on this year’s. There are no big projects on the horizon for North Haven, he said.
Stone reported that construction activity consisted mainly of additions and renovations, but there are no major housing starts this year, “Somewhat unusual considering the past ten years,” he said. Marjorie Stratton, Vinalhaven’s town manager said that work continued there on a few projects for wealthy summer people.
On Islesboro, Diffin says contractors told her that some summer residents have halted projects. Numbers of off-island workers commuting daily to the island have dropped significantly which will affect the Department of Transportation ferry income figures (the state runs the ferries to these three islands). Island stores have noticed a change in lunch and coffee sales. Diffin said she expected to see the average number of new buildings, about five, started this again this year.
Excise tax numbers reflecting car, truck and boat ownership have not changed significantly in any of the communities. Stone observed that he had not seen any new trucks lately, and Diffin said that tax numbers are a little behind but not by much.
All the town managers report little change timeliness with property tax payment. Statton said, “I’m really surprised that property tax collection is pretty normal,” though she thought perhaps she might see a change in May when the next payment is due. Diffin said, “We are lucky that many people paid the full amount of their taxes in September,” before the economy tanked in October. Stone said he expected to see slower payments in the next year.
The decline in fuel oil prices has kept dire neediness at bay for some islanders. All three town managers said that they have seen no significant increases for general assistance. Both Islesboro and North Haven have community foundations or church groups to whom residents prefer to turn first when times are tough.
All the islands have observed less activity and traffic generally. Diffin noted that many Islesboro’s summer people did not return for fall weekends, and that “the transfer station is quiet.”