As prescribed by charter, the January Three Board meeting brought together the boards of finance, education and selectmen to take a collective look at what Fiscal Year FY26 may look like. In a sense, the budgeting process is year-round. No sooner than one year is approved at referendum then the boards and administrations monitor monthly operating budgets, prepare to close the books on one fiscal year and then prepare for the start of the next. In late March when the board of finance finalizes the overall budget for review and comment at the public hearing—and then on to referendum—we also have an eye on the next few years to consider stability in both budget and mill rate changes.
We had more than a dozen years with both parameters averaging about 2 percent annually. The years since the pandemic have seen an uptick in costs due to inflation, and the impact on learning from the pandemic lockdown period. The current salary contracts, here and throughout the state, have been running a full percentage point or more than for that prior long stretch. As compensation makes up the bulk of both the municipal and education operating budgets, those pressures are driving higher increases in expense. Typically, as go the contracts, so go the budgets … and the tax rate.
At the Three Board meeting both operating boards presented their initial look ahead at next year, known as the Plus One budgets. The board of finance modified its budget worksheet from last spring, updating some current estimates in some line items in revenues as well as the Plus One expenditure numbers which reflect what the administrations would like to see in the upcoming fiscal year that begins on July 1 (FY26).
On the expenditure side of the equation, the municipal component shows an operating budget increase of 2.40 percent, a flat Debt Service, and an increase through this General Fund budget of $250,000 into the Small Capital/Infrastructure fund. This increase reflects the impact of both inflation as well as the needs for maintaining plant and equipment that age year by year.
On the education side, the operating budget submission is at 5.67 percent, with a significant part being for the various categories of special education services. These run the gamut from remedial services to help students stay at or get to grade level proficiency to six figure outplacement situations for those with severe disability that cannot be handled internally.
On the revenue side, while minor updates have been considered, we await the finalization of the Oct. 1, 2024, Grand List by Jan. 31, and the statutory grant revenue numbers for Granby that will come out in the governor’s biennial budget proposal on the first Wednesday of February.
As it stands, the initial calculations using the Plus One expenditure submissions and relevant revenue projections drive a mill rate change of roughly 6 percent. This high level of tax rate change will not stand, as the process unfolds over the next two months and the two operating boards and administrations review and revise what they present in late March.
The board of finance expects to finalize operating guidelines and the budget for fiscal year 2026 on Monday, Feb. 10 at its 7:30 p.m. meeting, once the final Grand List numbers and the governor’s proposed municipal revenue listing are available. Public input is welcome.