BOS Budget Proposal Has Measurable Spending Increase, Minimal Mill Rate Hike
Due to a 26% increase in motor vehicle valuations and a number of other drivers including a possible new recycling contract, the initial Board of Selectmen (BOS) budget proposal was presented incorporating an approximate 5% spending increase.
However, First Selectman Dan Rosenthal at a January 18 Board of Selectmen special meeting said that increase, while it may look large, will currently only translate to roughly a .5% mill rate increase, depending on what the Board of Education budget looks like. A mill represents one dollar in taxation for every $1,000 in taxable property.
The Board of Education budget was also being presented by Superintendent Lorrie Rodrigue the same evening. Reporting on the school district presentation is featured in this week’s print edition of The Newtown Bee, and at newtownbee.com.
The proposed municipal budget is $45,730,087, a $2,208,231 million or 5.07% increase over the 2021-22 budget of $43,521,856. The municipal budget also contains all debt service on bonding, including all school district projects.
The increase in revenue from motor vehicles is translating to a larger budget bottom line because Rosenthal is proposing to put the majority of the extra revenue from motor vehicles into the Capital Non-Recurring fund, expecting the increase in motor vehicle values to be an anomaly that will “revert” in the future. According to Finance Director Robert Tait, the change in the motor vehicle grand list is $70,002,199 — a 26% increase or generating $2.4 million more in taxes this fiscal cycle.
Due to the current strained automotive market, which is seeing shortages of new vehicles due to parts shortages and global shipping woes, motor vehicle evaluations, according to the sources the town uses for values, had a large increase last year.
“No resident is going to be pleased their vehicle is worth more for taxes,” said Rosenthal. “We don’t make that judgement. By law we have to collect the taxes [at their current values].”
Typically the motor vehicle grand list will increase 2% to 5% year to year, which usually reflects the buying of new vehicles.
“If we appropriate a portion of it to one-time expenditures like capital and non-recurring items we can offset a revenue loss in the near future by reducing the capital and non-recurring appropriation (to zero if need be),” stated Tait in a document concerning the motor vehicle grand list. “This will help avoid a swing in tax rates from year to year. The rest of the additional tax amount is going towards offsetting taxes.”
Offsetting Extra Revenues
However, Rosenthal said he doesn’t want the town “to take the shovel and keep digging,” so he proposed that the town bank $1 million of the extra revenue into the Capital Non-Recurring fund, rather than use it in the regular budget.
“This increases the overall budget but offsets the revenue,” said Rosenthal. “The benefit is we can use this to offset bonding or capital expenditures. The idea is to roll the money back to the taxpayers.”
By not using that money in the regular budget, if motor vehicle evaluations do return to normal, the town doesn’t have to cut $1 million in spending from the budget next year, because it won’t have added that $1 million in spending to the budget this year.
“I think this is prudent,” said Rosenthal. “We’re not emptying the piggy bank to take care of this budget at the expense of future ones.”
Rosenthal classified the budget as one that was as “lean” as he could make it while still making sure “all the trains still run on time.”
Another major driver in the budget increase is $250,000 for roads. The increase represents what will be the end of a five-year plan to eliminate borrowing money to pay for roads and do all road work directly from the operating budget. The full road work budget line for this year is $3 million.
“We’ve stuck with the plan and I think that’s wise,” said Rosenthal. “We are no longer borrowing for roads. It’s best to not use money from roads to fix budget holes.”
Rosenthal said that without the $1 million going to the Capital Non-Recurring fund from motor vehicle revenues and without the $250,000 for roads, which would have been bonded anyway, the budget increase would only be $958,231, a 2.2% increase.
Proposed Departmental Increases
Driving the remainder of the increase is $268,000 for wages and benefits, of which $250,000 is wage increases, $21,000 is Social Security on wage increases, $143,000 for group insurance, and a $146,000 savings in pension contributions. There is also a $33,000 estimated insurance increase, with budget documents saying the final number will be available next week.
Other drivers are:
*$40,000 for emergency communications lines and service contracts;
*In the Highway Department, $15,000 for overtime, $103,000 for gasoline, and $45,000 for other expenses;
*$52,000 for winter maintenance;
*$271,000 for an increase in the town’s recycling contract (this number may be adjusted depending on how a subcommittee examining options decides);
*For building maintenance, $15,000 for water/sewer and $35,000 for contractual services;
*$29,495 for a new assistant position at the senior center, with an $11,000 savings from the elimination of a current part time position; and
*$20,000 for items in the Parks & Recreation budget.
Rosenthal said that after review by the Board of Finance and Legislative Council, “they may land in a different spot.” He said that he has certain things in the proposed budget, such as the maximum cost of the recycling contract, because legally it is easier to cut or eliminate those costs during the budget process than add them back in.
“I think while there are differences of opinion [between the different boards], I think we’re all on the same side in wanting what’s best for the town,” said Rosenthal.
Rosenthal said that this budget leaves the town “in a good position for the future.” While the town saw a three-tenths of a percent decrease in the mill rate in 2019 and saw the mill rate remain flat the last two years, he felt that a half-percent increase this year keeps Newtown’s mill rate low and “competitive with other towns.”
“I’d like to keep the lid on the mill rate as much as we can,” said Rosenthal. “The more we keep a lid on it, the more competitive we get. People are being pinched all over [financially], we don’t want to pinch them more from our end.”
The Board of Selectmen was expected to meet again on Thursday, January 20, to review and discuss the Edmond Town Hall budget, the Department of Public Works budget, and the Fire Department budget. Another meeting is planned for Monday, January 24.
Reporter Jim Taylor can be reached at email@example.com.