FY19 operating budget guidelines set

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In mid-February the Board of Finance set the expense limits it looks to see from the two operating boards—Selectmen and Education. Throughout this last November, December and January, their administrations had formulated the Plus One budget projections for the upcoming Fiscal Year 2019 which runs from July 1, 2018 through June 30, 2019. At the annual three-board meeting in January this information along with projections for capital expenses for FY19  and beyond, was provided to the finance board. The initial selectmen request reflected a 4.52 percent increase while that for education was 3.85 percent. The education request is largely driven by anticipated special education costs including outplacements. In both requests the compensation components include applicable salary steps and benefits that drive a 2-plus  percent increase on their own.

Revenue estimates were built taking into consideration what the Governor’s revised budget proposes for Granby for next year. This is a couple hundred thousand dollars less than both what he included last year at this time as well as what the legislature approved in their budget package last fall and was signed by the Governor. The property tax category was built using the full rate across the board rather than the reduced rate of 32 mills which was set by state law for last year, a reduction which was to be offset by state money that never appeared because of its own fiscal problems. While the state left open to the towns the option to rebill its taxpayers on motor vehicles or even on the entire Grand List including real estate and personal (business) property to offset losses from the state revenue categories once the final FY18 state budget was passed, the boards in Granby declined to do that. Instead they opted to keep a tighter rein on spending to help fill the gap and absorb losses internally. Unanticipated revenues in other categories will also help cover shortages from the state in the current year.

With respect to overall property tax, the Grand List itself is up by 1.36 percent before any final adjustment by the Board of Assessment Appeals. Roughly half of this increase is attributed to revaluation, the remainder to growth. While the growth factor and the use of the full rate on the Grand List’s motor vehicle component help in covering cost increases for the upcoming FY19, negative impacts from the state keep occurring. In just this month, the state bond commission failed to include for bonding the source for half of the Town Aid for Roads revenue line item, shortening Granby by about $130K.

The hold backs, the rescissions, the shortages all add up, and in various ways, affect the tightness in operations, the shortages in overall revenue and ultimately in both the health of the General Fund as well as the calculations in setting of the mill rate itself.

The distressed fiscal condition of the state trickles down to the town impacting projections of revenues and how tightly local government spending must be held. Given the times and the environment, we set operating budget guidelines that look to bring in the selectmen number at approximately 2.1 percent. We look for the BOE piece to be no more than the initial request of 3.85 percent, which less the special education increase, is also a similar low 2 percent operating increase for the remainder. These numbers – though tightening operations – are currently anticipated to bring in a mill rate change similar to that in recent years of roughly and hopefully less than 2 percent. Given the constraints and difficult state fiscal situation, at this juncture we believe this puts us in a reasonable spot overall.

Over the next month the administrations will present their adjusted budget requests to their respective boards. During March the boards will hold budget workshops on these requests.

On Monday March 26 the boards will submit their budget requests to the Board of Finance per town charter. The Board of Finance will, that night or the following night, assemble a final budget package to take to Public Hearing for public review and comment. Per the town charter this hearing is to be held on the second Monday of April, April 9, with the referendum vote to take place on the fourth Monday, April 23. The Public Hearing is where the recommended budget package will be presented and heard, and where the public may provide input and comment. Once the hearing is closed, the Board of Finance will decide the final budget , as is or modified, to be sent to the machine vote.