Spending Held Tight – Revenues Flat
By Michael Guarco, Chair, Board of Finance
Preparations for the FY2016 Budget are underway…against a backdrop of essentially flat revenues. At the three-board meeting held in late January both the school and municipal administrations presented their estimated budget requirements, both of which were in the 3.5 percent increase range. As work has continued on them and more and better information becomes available, both administrations and the boards of selectmen and education are working to develop the final spending requests which will be submitted to the board of finance. These form the basis for what the BOF then forwards on to public hearing and the referendum vote.
While the initial snapshots for FY16 expenditures presented to the board of finance at the January three-board meeting made a good case, by and large BOF members came away with the omnipresent sense that the numbers need to come in reflecting a lower rate of increase so that we can forward a FY16 budget proposal that calls for a modest mill rate change of below 2 percent, similar to our stance last year.
While it is recognized that there are significant cost increases in certain categories from inflation and certainly from somewhat modest labor contract provisions, it is also true that for taxpayers wages are generally pretty much flat even. They too face rising costs within their own household budgets. Given this dichotomy, the BOF consensus has been to keep spending tight so as to bring forth a minimal tax rate change.
As the Governor asked to present his state budget on the third Wednesday of February – two weeks later than customary – the board of finance opted to delay, as well, the formal step of setting operating budget guidelines for the BOS and BOE. This was done so that we would have the proposed state revenue numbers to work with, which come from the Governor’s budget proposal. While there was noise of state aid to the towns being cut from current levels in the upcoming budget, the actual proposal keeps state aid essentially flat to the towns, which eases a concern of ours. While the grand list does show an increase of 0.58 percent, other revenue categories are anticipated to show declines. Thus, while the overall total will be slightly higher, it won’t go far in covering the anticipated increase in cost of funding the town and school operating budgets. Hence, where we set the spending limits will factor directly into what the needed mill rate change will be.
At this point we believe the tax rate change should be under (and certainly no more than) 2.0 percent. To do this the guideline targets for both boards will be in the 2.0 percent range as well. Final operating budget numbers will ultimately be combined with all the various revenue pieces as well as infrastructure —small capital—and debt service in the budget proposal for FY16. Once finalized by the board of finance, the combined package will be sent forward to public hearing on the second Monday of April per town charter (April 13), and thereafter to a referendum vote on the fourth Monday of April (April 27).
BOE members discuss priorities with legislators Granby Board of Education members Mark Fiorentino and Melissa Migliaccio recently travelled to the state capitol with Superintendent Alan Addley recently for a legislative breakfast. Senator John Kissel, state Representative Bill Simanski and state Senator Kevin Witkos attended in support of the district and discussed educational priorities and funding issues for the upcoming session. photo by Joe Lemieux