Paris contemplates quarterly tax collection

PARIS —  Town officials are thinking about switching to quarterly tax collection as a way to strengthen the town's financial position.

Town Manager Amy Bernard told selectmen, during their meeting February 12, that she was "thinking outside the box" for solutions to the town's financial difficulties.

Currently, the town collects taxes twice a year – in November and May.

With quarterly collection, the town might take taxes in August, November, February and May. The change would take place for the next fiscal year.

Last month, Bernard reported that the town was on track to run out of operating funds by the end of March.

Poor financial management by the previous administration had left the town in a situation where it might have to take out a tax anticipation note to hold it over until May, when taxes started to come in, incurring further interest and fees.

During the February 12 meeting, Bernard told board members that the town could stabilize its financial situation by switching to quarterly collection.

She reported that Bridgton faced a similar situation a few years ago and quarterly collection helped it work through the issues.

More frequent collection would allow the town to have more cash-on-hand, but could also ease the strain on taxpayers, Bernard said – residents might find it easier to save for lesser, but more frequent payments rather than two large payments each year.

Most importantly, Bernard reported, switching collection times would prevent having to take out a TAN if the town again ran out of money next year.

Authorizing the change would be the responsibility of the board, Bernard said.

Selectmen voiced support for the idea, but requested more information.

Vice Chair Bob Kirchherr said the idea had many "pros," but he wondered what the "cons" might be.

If the town made the change, Bernard said, the most significant hurdle would be informing residents about the new schedule.

"Change is difficult and you've had these due dates for a long time," Bernard said.

One worry, Bernard said, is that taxpayers could remain unaware of the change and accidentally accrue interest on their tax bills.

Otherwise, she said, there appeared to be few downsides, but said she would like to continue researching the issue.

Board members voted unanimously for Bernard to continue researching the issue and provide an update at their next meeting.