The traditional Three Board Meeting held in mid-January began the focus on the budget for Fiscal Year 2025 (FY25 runs from July 1, 2024 through June 30, 2025.) At this meeting the Boards of Selectmen and Education presented their projected operating budgets, infrastructure and capital needs to the Board of Finance. While the focus is on the upcoming year, included as well is an early look ahead at the near-term years beyond FY25. Historically, Finance looks to consider the longer view rather than just the budget for next year. As part of this exercise, the Board of Finance provides a projection of what the impact of the Plus One budget submissions may look like, and what the mill rate implications may be.
There was a time many years ago when the estimated costs of meeting the needs of the town were essentially laid on the table in late February and March. Then, with a flurry of activity between the Boards, the budget was put together for the April public hearing and subsequent vote. Oftentimes more and earlier communication between the Boards would have proven more useful in reducing tensions and narrowing the differences in perspectives and expectations. The operating Boards would often put high numbers on the table while Finance had lower spending and mill rate targets in mind and not a lot of time to bring it all together.
With the Plus One budget process currently in use, the back-and-forth communication now takes place months earlier and provides the respective boards more time to consider the administrative projections. They collectively work to bring forth a reasoned expenditure plan that looks to meeting the town’s needs while being mindful of the cost to the town and its taxpayers.
The environment we are currently experiencing factors in a change in the cost and the scope of what it takes to address the needs of our community. Take inflation. For the past couple of years, it has markedly impacted what we pay for virtually everything, and the town is not exempt. Rising inflation has played a role in driving up the cost of compensation. Wages as well as benefits (particularly healthcare) and payroll costs are the largest components of the overall budget.
Other complicating factors include the non-stop growth in special education costs as well as the need to address a wide variety of security-related issues and human resource needs in an increasingly complex and litigious world.
For the past dozen years, we have experienced budgets that averaged a 2 to 3 percent range with net mill rate changes of less than 2 percent annually. In FY25 we are dealing with bigger numbers. The initial Plus One operating budget submissions from the Boards of Selectmen and Education are 7.46 percent and 6.43 percent, respectively.
Despite the anticipated growth of the Grand List and a planned significant draw on the General Fund (and all other assumptions held equal), those operating requests could lead to a 5 percent change in the mill rate. That said, both operating Boards and administrations will be working through the cost of meeting projected needs, and the revenues picture will become clearer. The Grand List number will be known by Jan. 31. Sometime in February, the governor’s recommended budget adjustments will be announced, which may send a little more support.
Over the next months, we will see both sides of the Granby budget equation inching towards each other as the Boards collectively work to address the perceived needs of our town, while paying heed to the cost to do so. This year looks to be a bit different with greater challenges.
The Board of Finance will finalize budget guidelines at a meeting on Feb. 13 at 6 p.m. at Town Hall. Public comment will be taken then, and prior to, setting these targets.