The Board of Finance set operating budget guidelines of 3.25 percent for the Board of Education and 2.4 percent for the Board of Selectmen at its Feb. 10 meeting, with the goal of keeping the mill rate change for FY26 in the 3 percent range.
While this accepted the initial request from the Town Manager of 2.4 percent, it reduced the Plus-One want list from the school administration of 5.67 percent down to the 3.25 percent. By not doing so, the tax rate hike for FY26 would have been well over 6 percent.
After the Three Board meeting on Jan. 21, the Board of Finance awaited finalization of the Grand List as of Oct. 1, 2024, required to be filed with the state OPM by Jan. 31. While we had anticipated a growth factor of around 1.5 percent, reflecting construction activity at both Station 280 and Harness Way, that expectation was effectively reduced to a reported 0.28 percent level of Grand List growth, mostly because of state actions that affect all of the state’s169 towns.
Last spring a bill was passed providing property taxpayers with a 100-percent military disability rating a full exemption from paying local property taxes. With no reimbursement from the state, that in effect shifts the tax burden onto the rest of the Grand List taxable base by $165K to cover it. The state also required a change of methodology in how motor vehicles are assessed, essentially shifting from using the market value of used vehicles to using the original manufacturer’s suggested retail sales price less a set depreciation schedule over time. Combined—these two brilliant moves by the state effectively negated what otherwise would have been a decent growth factor in the taxable Grand List. Granby is, however, fortunate because a host of towns actually saw their net Grand Lists decline because of these two changes.
Another state-related issue that also hits the towns – and local taxpayers – is that state government continues to shortchange the towns on the Excess Cost reimbursement grant for high-dollar special education outplacements.
The outplacement programs for students who cannot be easily handled within the district are often extremely expensive, often running $100-200K+. Per state law, the town is responsible for the cost for a qualified student up to 4.5 times (93K) the cost of an average student (20.7K) in our school system, after which the state is supposed to reimburse us for the remainder. However, there is a tiered prorated system of reimbursement so that a town only gets a percentage of what it should be reimbursed. For a decade we got about 75 percent of what we should have been reimbursed, but two years ago the legislature changed the law so that we were in an 88 percent reimbursement tier. But the reality has been that we have received 62 percent of what we should have seen from the state for last year and this year. What does it mean to us? Between the change in case load and the projected shortchange in rate, Granby looks to end up receiving about $500K less than budgeted in this revenue line this year and therefore budget a similarly reduced number for next fiscal year.
Combined, these three state-related factors are the equivalent of roughly half of the mill rate increase on the table, with the intent being to hold any increase somewhere below 4 percent given our consideration of long-term affordability. One should note that this goes a long way in highlighting how the actions — and inactions — of both the current leadership in the state legislature and the executive branch fit in the playbook of seeming to benefit one group or another, only to in effect shift the cost to others. All reminiscent of Tammany Hall—the buying of the votes—if not a legalized red-light district.
By early March the boards of selectmen and education will receive the final budget requests from their respective chief administrators and will spend a few evenings reviewing and digging into the proposals before moving to adopt their requests for submission to the board of finance. On Monday March 24, the board of finance will review the respective budget proposals, and send an overall budget package, as presented or revised, to the annual budget public hearing. Finance does not take public comment on the 24th, as the work being done that evening is being sent for public review and comment at the public hearing to be held on Monday, April 7 at 7 p.m. in the high school auditorium. That meeting opens with presentation of the overall FY26 budget proposal by the boards, followed by comment and questions from the public. Once the hearing is closed, we will consider whether to send the budget package forward —as is, or modified —to referendum to be held two weeks later on April 21.