Budget Outlook Grim
By Robin Vinci | Editor at March 24, 2024 | 6:30 pm | Print
Taxes Could Rise Next Fiscal Year
Starting with an 11 mill rate increase from the Board of Finance, Mayor Erin E. Stewart is working on trimming the budget numbers. So far she said she has cut it about 5 or 6 mills, but a tax increase is very possible this coming July. The mill rate is presently 49.
“It is looking pretty grim. Our taxpayers cannot sustain another budget increase like that so we need to get that down,” Stewart said. “The problem is our debt service payments are rising because of bonding in 2011-13. We are trying to manage the debt with restructuring, but our payments are still going to rise.”
In two years the payments double. Stewart said she needs to plan ahead. The budget surplus helps plan for the future.
“I am trying to do a budget that does not tap into that rainy day fund, because there are so many unknown factors with the state,” Stewart said. “I don’t know what our municipal aid is going to be cut by. We receive over $17 million a year in municipal aid. We need that just to function.”
If the state aid gets cut, the money will come from the rainy day fund.
“We can handle now what is happening and plan for the future, but eventually we will have to tap into that as our resources from the state dry up,” Stewart added.
Big increases this year are in debt service such as employee medical services. They are related to bonds that were done between 2008-2013.
“A lot of great things are happening like the Grand List growing and new businesses coming, but the Grand List growth equates to about $1 million. It is not growing fast enough for what our increases are,” said Stewart. “We are going to figure it all out, but I need to get creative on how to maintain the level of services we provide for our residents and balance that with how much we pay.”
The City Hall budget was cut to the point that employees buy their own pens and pencils, because there is no budget for such things.
The bulk of the budget is for salaries. The workers union is renegotiating this year and Stewart hopes savings will take place.
“A tax increase is on the table. The situation at the state does not make it easy for towns,” said Stewart. “We are going to lose $4.5 million on car taxes. I have to make up that money somewhere.”
The state is paying car tax numbers from 2013 rather than 2015-16 and there is no guarantee how much each town will get.
“We are going to be out money. There is no doubt about it,” said Stewart. “We have to take out of one pocket and put it on another.”
Stewart said she is working with the finance team to find more savings.
“We need to protect our infrastructure too. We have parking garages we have to repair, stadium maintenance, roads and more,” said Stewart. “The schools have big issues too. They have $4.5 million in contractual obligations. If we flat fund the schools, where are they going to cut from.”
Stewart said she is working closely with new Superintendent Nancy Sarra.
“That is going to be a great partnership that I am going to value so much. I never had that relationship before,” said Stewart. “The outlook is grim right now, but I still have time to figure out my budget. My goal is to get the mill rate down as low as I can, but we face realities. How much more can we cut when it is already bare bones? It’s a shell game and the State is forcing us to play it.”
The Mayor must present her budget to the Council on April 13. The Council needs to adopt a final budget by June 8.
