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BY MEGHAN V. MALLOY
Staff Writer 10/08/2008

Staff Writer

Fewer than half of Kennebec County's 30 towns, cities and townships have paid their county taxes, which were due Sept. 3.

But they aren't being penalized -- yet.

Kennebec County Finance Director Peter Dunn said although county taxes from municipalities were due Sept. 3 -- the first business day in September -- a 60-day interest-free grace period allows towns and cities to pay later without being penalized.

The grace period ends Nov. 3. The next day, an interest rate of 11 percent will be applied to any late taxes.

Some municipalities, such as Gardiner, have no choice to but to wait.

"For us, the first due date for (receiving) property tax was only Oct. 1," said Jeff Kobrock, Gardiner's city manager and treasurer. "Before Oct. 1, we wouldn't even see an influx in our office of taxes. Probably more like a trickle."

Other municipalities, such as Augusta, chose to wait until the proverbial 11th hour because it is financially beneficial.

"Because of the amount we have to pay this year is so large, we'd rather hold on to it as long as we can so it can earn interest," City Clerk Barbara Wardwell said.

Augusta will pay Kennebec County almost $1.4 million in taxes this year.

"We're not waiting to pay the tax because we aren't able to," Wardwell said. "That's not it at all. But the interest we earn on it is significant enough, it's really to our advantage to hold on to it."

Kobrock agreed.

"I'm not surprised that only 40 percent of the towns have actually paid already," he said. "It's about cash flow. You always want to hold on to your money until you have to give it to someone else."

Some Maine towns outside aren't so lucky.

Monday night, selectmen in the Somerset County community of Hartland told its residents the town is in dire financial straits: They are faced with an immediate $400,000 bill from the school district and almost $300,000 owed in tax to the county, and no money to pay either.

"Our finances right how are down to nothing," First Selectmen Harry Gould was quoted as saying at Monday's selectmen meeting. But Dunn did not express concern about any towns or cities in Kennebec County paying past the "late date" of Nov. 3. "It's been several years where someone did not pay," Dunn said. "But if we have to, we may send out an informal notice the last week of October just as a reminder."

Meghan V. Malloy -- 623-3811 Ext. 431

mmalloy@centralmaine.com

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