Less than four months after repealing a Proposition 13-style property tax limitation, residents of this small coastal city are still bitterly divided over how the community's purse strings should be handled.
For the past year and a half, the city has been on a financial roller coaster ride, one that has taken it from the heights of uncertainty to the depths of a default.
In 1978, the city was split in two when a citizens' tax revolt led to the adoption of Maine's first California-style municipal spending ceiling. Voters repealed the controversial measure this summer after seeing municipal services crippled by mass layoffs and watching the city plunge into the worst financial crisis of its history.
But the repeal did little to heal the division that has pitted friend against friend and family against family for more than a year.
There is still widespread disagreement over whether the $3 million tax limitation was solely responsible for the city's financial troubles. But a growning number believe that the year-long experiment with limited taxes has compounded Saco's problems enough to make the banknking community hesitant to lend it money.
"We've made real progress in the last few months," said Curtis W. Tripp, who took over as city administrator last year and resigned this month in frustration, "but we're not completely out of the woods yet. There are still a lot of uncertainties facing us when we begin 1981."
One of the uncertainties is who the city will hire as its next city administrator. Although Saco officials have several candidates in mind, they have admitted that finding a qualified replacement now is not going to be easy in light of the current political and financial difficulties resulting from the tax restraints.
The financial uncertainties stem largely from a major financial crisis last December, when the city defaulted on a $2.1 million bank loan and found its cash assets frozen by its principal note holders.
Although the city managed to meet its payrolls in the following months -- with a high-interest, short-term bank loan that was later refinanced as part of a $292 million tax anticipation note -- the taxing limitation continued to cloud the city's ability to pull itself out of its financial quagmire.
Three months ago, a group of residents who were concerned about the growing financial problems and the drastic cutbacks in city and school services, managed to muster enough support to have the tax ceiling defeated in a special referendum.
With the limitation gone, Tripp observed, "I think things can begin to take shape financially although it's going to take some time and a lot of care." He noted that the banks' reluctance to lend the city money has brought Saco to the brink of financial disaster several times since last year's paralyzing default.
But not everyone agrees that the repeal will solve the city's financial problems.
In fact, the debate over how the city's money should be managed and its taxes raised is once again rising from the dust.
Robert Cassette, the Saco resident who wrote the original tax limitation measure, noted that the voters who came out to repeal it last month "did so because they expected certain services to be restored.
"But here we are a month and a half later," he said, "and it doesn't look as though those services that everyone screamed about are going to put back into the budget."
After the ceiling was first imposed, city and school officials made sweeping budget cuts, laying off more than 50 of the school system's teachers and municipal employes. Some of the services to go werew the municipal rubbish collection and the city's ambulance.
Although the ambulance is due to be restored Oct. 1, rubbish collection seems to have no hope of being revived -- at least this year -- because the service was not included in the city's $600,000 supplemental budget passed this summer.
Cassette and many others think the tax limitation was not given a chance to work. Some have charged that city officials deliberately cut vital services such as the ambulance just to try to prove that the tax measure would not work.
"There's no question in my mind that the property tax limitation wasn't given a chance," Cassette said.
But he added that many supporters of the measure have conceded that the spending limit -- which set the property tax levy at $3.06 million and allowed for a 2 percent increase per year -- was too severe a limit and "needed some adjustment.
"The tax cap came about because people were going to city hall looking for some relief with their rising taxes, but not getting anywhere," he said. "So they went out and did something about it themselves by petitioning to bring the tax cap proposal to referendum.
"I still think it would have worked if it were given the chance," Cassette said.
But Newton Sanborn, a local resident who once served on the city council, doesn't see it that way.
"The tax cap was the most damaging thing that every happened to this city," said Sanborn, who was active in the drive to repeal the measure. "The repeal -- under the circumstances -- was the best thing that could have happened."
Although Cassette and other supporters of a tax ceiling fear a sudden and drastic tax increase this year as city officials move to restore city workers and services, Sanborn said the thought of a tax increase "doesn't bother me."
Local officials predict taxes may go up by $4 per $1,000 valuation this year, bringing the tax rate to $20 per $1,000 valuation.
Former city administator Tripp said he's optimistic the removal of the tax limitation "will help the city's financial situation in the long run." But he noted that the city still must find a way of paying for a $540,000 sewer construction bond when the payment comes due next January.