The Bangor Daily News’ article (Feb. 18), “Moody’s lowers city’s bond rating,” apparently was not received with enthusiasm by our city management. As you read the article you can see why Bangor should be concerned. Not by the change in rate, but by the reasoning behind it.
Moody’s Investors Service commented that Bangor’s tax base growth rate was 1.8 percent vs. those included in the Aa2 group of 3 to 6 percent. This is hard to understand viewing the Stillwater Avenue-Hogan Road area. But this is just one part of Bangor.
A closer look shows that, even in that area, there is movement; businesses are coming in and businesses are going out. Looking at downtown, we now own two of the largest buildings because of failure to pay property taxes, with possibly more to come.
According to Banog’r audit report of June 30, 1998, our assessed and estimated market value increased $145 million from 1992 to 1998. This included net new commercial and residential proiperty of $137 million, taken from our information provided to the state Bureau of Taxation. Dividing the $137 million by the $1.242 million 1992 total assessed value results in an increase of 11 percent over six years for an average of 1.9 percent a year. That’s not far from Moody’s 1.8 percent.
Another recent article in the Bangor Daily News reported thta population (census bureau) in Penobscot County had decreased 2.9 percent from 1990; including the surrounding counties that make up Bangor’s economic area, and there is little population change.
Bangor’s expansion has been primarily in the retail and related fields, drawing from the surrounding areas as well as Bangor. Many of the “new” jobs are just replacement for those lost by the closing of smaller operations in Bangor and the smaller towns. And many of these “new” jobs are part-time. This would have an effect on the Moody comment that our per capita income is 25 to 30 percent below their level for an Aa2 rating.
Consider what has been and is happening in the manufacturing plants in Bangor and our area. Businesses such as this produced or added value to products, shipping them throughout the country, creating an inflow of funds. Since many of them were locally owned, the funds stayed here. With the large national retailers, the funds generated flow out, since Maine products represents a smal portion of their total sales. A constant outflow of funds brings on a slow death.
Bangor has been surrounded by large mills in the pulp and paper industry, full of well-paying jobs. All you have to do is read the paper and listen to the radi and TV media to understand they have problems. Foreign competition where labor and material costs are minimal are trying to take over. If we love these mills, Bangor will be affected greatly. How long will the big retailers stay when they money dries up?
It’s a basic situation: If cash outflow exceeds inflow, growth will vanish.
A couple of years ago, the Bangor Daily News printed an article by the late Charles Sullivan, a business professor at Husson College, a former member of the Bangor School Committee and, at that time, a member of the Bangor City Council. His message was that the world was changing, and if Bangor wanted to participate, we had to change. Sullivan tried to convince Bangor’s management and the City Council, but his efforts fell on deaf ears.
Now we have city management trying to put a pretty face on a situation that has been slippiong away each year. Whether they are aware of what surrounds us and looking the other way, or just do not understand, it makes no difference. Bangor needs change.
In 1990, Bangor’s general fund expenditures were $42 million, increasing to $58 million in 1998, a 38 percent increase. The 1990 tax rate was $17.75 per $1,000, increasing to $23.35 in 1998, a 32 percent increase. It’s common knowledge that when the price of oyur product gets too high, consumers go elsewhere.
Regardless of how it is done, zero-base budgeting, a complete review of our costs from top to bottom, or some other method, Bangor needs a change in attitude and operation.
It’s in the hands of the City Council.
Arthur Tilley Sr. lives in Bangor.