Building the budget

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While spring and the April budget vote may seem a long way off, the administrations on both the municipal and education sides have begun placing some focus on the upcoming fiscal year (FY21) that begins July 1, 2020. Over the coming months the administrations will review perceived needs in formulating their budget requests to be submitted to the Boards of Selectmen and Education. Per the Town Charter, these boards submit their final budget requests to the Board of Finance for its review and any changes prior to forwarding the recommended budget package to the annual Public Hearing. There are numerous junctures between now and then when citizens may provide input to the two operating boards, as well as to the Board of Finance. Each board meets regularly and allows for public comments (check with Town Hall for dates and times or visit the town website at Your input then can have impact as the boards deliberate their budget plans. The Public Hearing will be held next year on April 13, 2020. That night is an important and final step in bringing the budget proposal forward for public comment and input. The Board of Finance may make final adjustments before sending the budget on to referendum on April 27, 2020. Last year only one person chose to make comment on the current FY20 budget package at public hearing—a far cry from 20 and 30 years ago when it wasn’t unusual to have a couple hundred people attend the hearing and often dozens would render their perspectives.

Over the next couple of months while the administrations prepare their budget requests, the Board of Finance also seeks pertinent data with respect to our revenue projections, and relative changes year to year within the expenditure projections from the other two Boards. The formal Plus One budgets, submitted to Finance around Jan. 1, are the preliminary look ahead at what the next fiscal year may look like. Those initial projections are discussed with the operating boards at a Three Board meeting – typically held on the Tuesday after the Martin Luther King holiday, where the finance board also considers both any known and not-yet-known revenue components. At the January Board of Finance meeting, the auditors review their financial audit findings for the prior fiscal year, and we discuss the tentative operating budget guidelines we set for the upcoming fiscal year. We finalize these guidelines in mid-February, once two key pieces of revenue information become known. These are the growth in the Grand List year over year that is filed with the state by Jan. 31, and the intergovernmental revenue amounts contained within the governor’s early February budget proposal. Only when we have all these pieces of information can we set about the task of weighing expenditures, as perceived by the two administrations and the operating boards, and the impact on property taxes in relation to the other components of the revenue picture.

I’ve often said that as go the contracts so goes the budget. With compensation –-salaries and benefits—making up roughly three-quarters of the operating budgets, even modest increases drive the budget. Overall Granby’s municipal and school salary schedules tend to be in the lower and middle ranges statewide, with generally urban areas and the gold coast paying more and smaller and rural towns paying less. Under the collective bargaining and binding arbitration system and applicable laws in labor-friendly Connecticut, the average settlements—general increase plus step increases where applicable— are still in the mid 2-plus percent range whether negotiated, mediated, or arbitrated. With health plan increases year to year of roughly 10 percent, the combined impact of compensation increases for Granby is then in the vicinity of nearly $1 million annually, not adding or deleting a single thing or position. That alone is the equivalent of 2-plus percent in property taxes. This becomes a key challenge the two operating boards face, as well as the finance board, in drafting a budget. While, through negotiations, they can gradually shift some cost by increasing the premium share employees pay for health insurance and with plan design coverage changes, it takes time and is an inch-by-inch process in the public sector in this state of ours.

In the next couple of years Granby has a couple helpful things in its favor: one is the declining Debt Service as we retire existing bonding and the second is the positive impact in this upcoming year and the next of the Ridgewood apartment complex across from Floydville Road. The additional cost of the Debt Service for the recently approved capital projects will be factored in and hits its peak about four years from now, when it alone will be equivalent to 2-plus percent in property tax. It is our intent to flatten the impact of the new debt over the intervening time to avoid a mill rate spike. Ultimately the real wild cards are if the legislature chooses to further reduce aid to the towns in favor of the cities, and if special education costs continue to mount.