As anticipated, the Board of Finance set operating budget guidelines that reflect both the challenges faced by the Board of Selectmen and the Board of Education as well as the impact of inflation and scarcity in today’s post-pandemic environment.
The initial forecast numbers presented by those boards to the Board of Finance at the January Three-Board meeting, and subsequent revisions, would have indicated a mill rate change of 5-6 percent. After review, Finance set the operating budget guidelines at just under 5.5 percent for each operating board. targeting a mill rate change of less than 4 percent—in this case 3.97 percent.
Over the month of February, the two administrations focused on refining their budget requests for FY25, balancing what is needed to meet their perceived needs within the fiscal constraints set by Finance.
At the same time, we are looking at the revenue side of the equation. The Grand List grew by 1.24 percent, primarily driven by completion of the second phase of The Grand across from Floydville Road and the initial phase of construction at Station 280 just north of the center. The bulk of the Grand List growth from the latter will materialize on the October 1, 2024 Grand List, with any residual being included the following year.
The governor’s budget revisions did us no harm, with the statutory grant formula monies for Granby essentially flat. The one exception is the anticipated fall-off of the $1.1M auto tax relief received in the current fiscal year going to zero for next fiscal year because our mill rate fell below the threshold for reimbursement.
To help offset this loss of revenue and the budget increase itself, a heavier draw on the General Fund is anticipated. Though the annual draw has been relatively light in recent years, the financial dynamics are different this year on both sides of the budget equation.
The Special Education Excess Cost Relief Grant is projected to be essentially flat currently from year to year, even though the case load and costs continue to escalate markedly. The services provided range from remedial and early intervention work to the often very expensive outplacements, all exacerbated by the disruption of the recent pandemic. The state commits to reimburse a town the cost for a particular student that is more than 4.5 times the cost of a typical student in town. However, in recent years they only reimburse a percentage of what they should. While lately that has been at 73 percent of the state obligation, last year the Lamont administration and the legislature made a big deal of raising the percent thresholds, to where we should have been at 88 percent reimbursement. But as the number of statewide-filed claims has grown, we will end up at about 70 percent for the current year and are using the same estimated percentage reimbursement for next year.
One has to count one’s fingers when dealing with the state. They will make a lot of noise about some new initiative to throw money at, while reneging on the obligations they already have committed to. The term “deadbeat” comes to mind…. As the saying goes, if the shoe fits….!
While the mill rate change isolated from revaluation has been fairly modest for the past dozen years, this year looks to be greater, given the combined revenue and expenditure projections to date. The budgets and mill rate changes have averaged less than 2 percent since 2010, while inflation was low and stable, reflective of the impact of the Great Recession that hit beginning in 2008. Similar macroeconomic forces in the other direction have impacted the economy and therefore the budget scenario we face today, as we look to balance the perceived needs of our community with the ability and willingness to pay the cost of doing so.
Some challenges are greater than they had been. For example, the special education expenses are about 22 percent of the projected FY25 education budget vs. 16 percent a half dozen years ago. Similarly, the work needed for security and internet technology concerns are a modern-day issue compared to a decade or two ago. Symptomatic of life in the world these days, the responses to today’s issues call for a different mix of expenditures and at a higher cost than in days gone by.
Striking a reasoned and proper balance is the goal as the boards work to craft a budget that meets the vast majority of the town’s needs while bearing in mind a sensitivity to the cost we bear as taxpayers in Granby.