As the boards near the conclusion of the budget-making process in preparation to send the final product on to Public Hearing for review and comment, they are faced with twin difficulties: managing the moderate but constant increase in the cost of doing business, and the uncertainty in state aid levels as seen throughout last year’s rollercoaster ride. Granby has experienced a nearly million-dollar reduction in state funding from last year’s state budget compared to what the Governor has proposed for the upcoming fiscal year. Absorbing the current proposals is the equivalent of a nearly 3 percent local tax rate increase, which adds to the difficulty in holding the line while simultaneously providing and maintaining quality municipal and educational program and services to the people of Granby.
With salaries and benefits representing three quarters of the combined operating budget overall, as go contracts so goes the budget. In general, Granby salaries are in the middle third compared with positions in towns similar to us and within the county. While compensation may be reasonable, the annual cost increase of some 2 percent plus applicable salary steps, health insurance and other benefits drive an increase in the cost of compensation of roughly 3 percent. At three quarters of the budget this means a 2 percent increase in cost right off the bat. Even keeping program the same year-to-year, this leaves only a quarter of the budget to work on to contain costs. It also highlights the need to pay close attention as contracts are negotiated—to remain competitive while endeavoring to control costs going forward. Recent examples of this include continually increasing the premium share employees pay as well as changes in plan design and benefit level. Lastly, reviewing overall staffing levels is critical in containing costs. This year with enrollment declining a bit, the BOE budget reflects a reduction in full-time equivalent positions by five people. On the municipal side, the staffing level is essentially the same as it was in the early 90s except for gradual additions to the police force to ensure having two officers and a supervisor on duty around the clock to provide a stronger and stable presence for protection as well as their role as first responders in medical emergencies.
On the other side of the equation is the revenue picture: A combination of various local fees, monies from the state as well as from other towns, and the workhorse of property tax on real estate, motor vehicles, and business personal property. Local revenues are a small and stable component of revenues as are the revenues from other towns. The state piece is far more significant. While it was $6.3 million in last year’s budget, it is reduced to $5.4 million in what the Governor called for in his FY19 budget revision last month. That major cut hurts and puts ample pressure on the municipalities to hold spending tight. It means timely reviews of existing operations to find better and more efficient ways of doing things or even cutting things where prudent to do so. Similar to the guidelines the Board of Finance sets for each of the operating boards, this makes the boards work harder to meet the needs of the people of Granby while paying heed to the cost of doing so.
The major component of revenues within the budget is the property tax. Stability in the rate driven by a modest increase annually in expense has been evidenced in nearly a decade of budgets now, since the onset of the Great Recession. Over this period both the yearly budgets and their respective tax rate changes (ignoring revaluation) have averaged less than 2 percent annually. To a degree this is notable, if not remarkable, given the cost increase pressures the boards face and is reflective of the fiscal constraint the boards adhere to balanced against meeting the needs of our community. While on occasion commentary comes our way that more – or less – should be spent, we tend to believe that we have a good product in terms of educational and municipal programs and services so maintaining a fairly flat year-to-year change in expense, is reasonable to pursue. Adding more would cost us more. To freeze the cost means cutting people and programs beyond the inherent tightness of both the guideline process as well as the financial pinch of declining state revenues. Between the two we strike the balance.