Understanding Your Tax Bill

As part of the FY26 Budget Hearings, we reviewed graphs that break down how your tax dollars are used. These graphs focus specifically on what’s known as the local tax raise—the amount of money that needs to be collected from local property and personal property (business equipment) taxes to fund the services and operations not already covered by other revenues.

The Town of Millinocket operates with four main budgets: Municipal, School, County Tax, and Wastewater. Each has different funding sources and responsibilities, and they all factor into your tax bill in different ways.

The Municipal Budget covers the day-to-day costs of town operations outside of the school and wastewater systems—such as public safety (Fire and Ambulance), Public Works, Recreation, Administration, and more. While the town receives funding from sources like state revenue sharing, vehicle registrations, and road assistance programs, these sources don’t cover everything. The remaining costs are paid by local taxpayers through the local tax raise. The municipal budget is developed by the town administration, reviewed with the Town Council, and finalized after two public hearings.

The school department is part of the town, but it has its own administration and elected School Board. The school budget covers Pre-K through 12 education and, like the municipal budget, receives outside funding from the State of Maine and educational grants. Any remaining expenses must also be covered through the local tax raise. The school budget goes through a different approval process than the general municipal budget. It’s developed by school administration, approved by the School Board, reviewed at a public hearing with the Town Council, and finally voted on by residents.

Due to a collaborative decision between the School and the Town Council on the use of carry-forward funds in last year’s budget, the school department budget for FY26 does not include those savings. However, overall anticipated revenues have increased, and the actual local funding “dollar amount” needed has decreased by $315,868 compared to last year. Unfortunately, due to unavoidable cost increases, and the use of those carry-forward funds in last year’s budget, the portion that must come from local taxes is increasing by $114,131. This also means that the school’s “percentage amount” of the overall tax bill will look higher than usual.

The County Tax is an annual payment the town must make to Penobscot County to cover our share of county government operations. It is included as a line item in the municipal expense budget, separated in the tax bill, collected, and paid directly to the county.

The Wastewater budget, like the other budgets, works as a utility. It funds the operation of the wastewater treatment facility and sewer infrastructure not the local tax raise but is paid for by users of the system based on their usage in a quarterly billing cycle.

Both the Town and the School Department are able to use unspent funds from previous years to reduce the amount of new taxes we need to raise. The town does this through its Unassigned Fund

Balance (UFB), which acts like a savings account. Our local practice sets a goal of having $3 million in this fund to maintain operations during the time between tax payments. Any amount above that goal is expected to be used to help offset municipal expenses and decrease the amount required to be raised in new taxes or address unexpected needs. The school department has a similar process using what’s known as “carry-forward” funds, which was referred to earlier.

When you receive your tax bill, you see a breakdown showing what percentage of your payment is going toward the Municipal, School, and County budgets. These percentages reflect the portion of costs not covered by other revenues and therefore must be funded locally.

Understanding how local budgets work helps us all be better informed about where our tax dollars go. If you have questions or want to learn more, I encourage you to attend public meetings or reach out directly.

Sincerely,

Peter Jamieson

Town Manager, Millinocket

The combined local tax raise for FY26 (July 1, 2025, to June 30, 2026) is expected to work out like this:

Municipal - Expenses: $7,799,865.00 Revenues: $5,447,916.00 (includes $500,000 from UFB)

Municipal Tax Raise: $7,799,865.00 - $5,447,916.00 = $2,351,949.00

School - Expenses: $8,825,838.00 Revenues: $4,992,824.00

School Tax Raise: $8,825,838.00 - $4,992,824.00 = $3,833,014.00

County: $413,086.00

Total Expected Tax Raise: Municipal + School + County = $6,598,049.00

Municipal – 36.64% School – 58.09% County: 6.26%