Finance Constrains Spending, Mill Rate Change

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At its Feb. 15 meeting, the Board of Finance reviewed updated information relative to the budget for FY24 that begins on July 1. The total Grand List—subject to any final adjustments by the Board of Assessment Appeals—was filed as required with the state by Jan. 31, and showed an increase with revaluation of 28.34 percent over the Oct. 1, 2021, Grand List.

Of this total, 1.31 percent is from actual net additions to the list, while the other 27.01 percent relates to the revaluation process. Given the previous list with its new valuations, a mill rate of about 31.5 would raise the same amount of property taxes as budgeted for the current fiscal year. It is estimated that the updated revalued Grand List, with growth, and the budget parameters being set in place, will keep any tax rate change at less than 2 percent. This brings any proposed new mill rate for FY24 to roughly 32.1 mills.

The executive-branch budget proposal from the Governor, with one conditional exception, proposes fairly flat state revenues to Granby for the next two years. That one exception is $1.1M in offsetting vehicle tax relief as earmarked for Granby in both upcoming fiscal years. As our anticipated mill rate will be below the current vehicle tax cap of 32.46 mills, one can reasonably anticipate that the state Office of Policy and Management will nix those amounts for any municipality whose new mill rate falls below that current threshold.

As noted in the February Drummer, the initial Plus One operating budget proposal looked to drive a mill rate change of about 2.73 percent. At this point, limiting the operating budget increases to at least 1 percent lower than initially submitted to the Boards, will keep the mill rate change under 2 percent—the target range we seek.

Any subsequent improvements on both the expenditure and revenue sides will be considered in terms of the longer-range picture. Finance is looking to take reasonable steps to maintain year-to-year stability in the tax rate and avoid significant fluctuation in the actual mill rate and tax bills.

Households, businesses, and government at all levels are adjusting to how the current inflationary environment is impacting the checkbook. While it may be easing, its pervasiveness will continue beyond the next fiscal year. As Finance works with the two operating Boards to manage next year’s overall budget, at the same time Finance will have an eye on subsequent years in the near term. Over the long haul, we look to effectively and efficiently meet the needs of our community, while being sensitive to the taxpayers who foot most of the bill.

While Granby is well-positioned to maintain stability in property taxes while meeting the needs of our townspeople, there can be an array of difficulties to overcome going forward. While the state is flush with cash, that can change quickly, and to our detriment.

While statewide, public-sector contracts had been for years reasonably manageable in the 2–3 percent range, that environment has been changing given the impact of inflation. Another 1 percent in wages is roughly equivalent to 1 percent in taxes. It is because of considerations like this that the Board of Finance looks to keep our town well positioned and prepared for what the future may bring us—not just next year but in the near-term years beyond as well.