As Lincolnville has grown and developed, so have demands for municipal services. This inventory of fiscal capacity is divided into three basic parts: an assessment of revenues, an examination of present operating expenses, and an analysis of the debt and borrowing capacity of the Town. Understanding the fiscal capacity of a Town is an important tool to help determine whether the Town has the financial capability to pay for future costs.

TOWN REVENUES

All Maine communities are heavily dependent on tax revenues generated by the value of private property. Property taxes are the single largest revenue generator for towns. All other Town-collected taxes make up a small segment of revenues, in comparison with property taxes. Past state legislatures have not allowed communities to utilize many other revenue sources.

The following table shows the Town's valuation. According to the Town Administrator, this information is generally almost two years behind. The Town's valuation is equivalent to 100% of market value only in past years when a revaluation is done. State law requires a revaluation when the Town's assessed value drops below 70% of the States valuation. Lincolnville's revaluation was just completed in 1991.

These figures reveal that the value of property in Lincolnville rose at a very high rate during the past eight years. The fact that the Town's assessed value did not keep pace with the runaway increase in market value can best be demonstrated by the sudden jump of 258% from 1990 to 1991 after the Town-wide revaluation.

Along with other Maine communities, Lincolnville gains significant revenue from a variety of other sources. State aid to education amounted to $232,000 in 1990. The following table illustrates the source and dollar amounts for this money.

EXPENDITURES

Education accounts for more than half of Lincolnville=s municipal expen-ditures. Educational expenditures rose from $514,444 in 1984 to $1,038,755 in 1990-199 1, an average increase of over $69, 000 per year. School enrollment during the same period increased only slightly.

In most small communities, road and bridge expenditures constitute the second highest expenditure of municipal revenue. Lincolnville is no exception. Road and bridge expenditures rose from $116,452 in 1984 to $283,319 m1990.

Waste disposal and Town administration account for other major expenditures of Town revenue. Waste disposal grew from $35,770 in 1984 to $52,409 in 1990/91. During that same period, administration expenditures rose from $50,520 to $100,171.

DEBT & BORROWING CAPACITY

A Town's outstanding debt is limited by State law to 15% of the latest state valuation. Good fiscal management limits debt to less than 5% of the valuation.

Lincolnville's 1991 assessed valuation, based on 100% of market value, is $146,881,910. Present debt is approximately $541,751, a figure which places its debt level well below 5% of assessed valuation.

Another way to measure the ability of a community to manage debt is to ensure that per capita debt does not exceed $400-500. Based on a population of 1809, Lincolnville's per capita debt is less than $300. The following table illustrates Lincolnville's outstanding debt.

CONCLUSION/ANALYSIS

Lincolnville is in relatively good fiscal shape. The 1991 town-wide revaluation added approximately 33% to the Town's net valuation. Lincolnville's outstanding debt is less than 1% of total valuation, allowing the Town ample latitude, if necessary, to borrow for future capital expenditures.

The key to Lincolnville's future fiscal health lies in controlling expenditures. The entire Town and school budgets should be carefully reviewed from a long-term perspective. Where capital expenditures are necessary, they should be thoughtfully developed in a capital improvements plan, a good example of planning ahead is the Five-Year Road Maintenance Plan being developed by the Town Administrator and Road Commissioner.

With a faltering state economy, Lincolnville's share of Revenue Sharing and State Aid to Education will likely be reduced in the years ahead.

To maintain a healthy and growing property valuation, Lincolnville's natural and community assets need to be protected. Developing a healthy local economy would broaden the tax base, easing the burden on residential property owners.