Mar 31, 2008
RIDGEFIELD SPENDING:
It's time to talk taxes & budgets
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A $122-million town and school operating budget that would increase spending by 4.85% will be up for public comment next week. Also up for scrutiny is a $13-million capital budget that includes expansions of the library and police station.
The Board of Finance will conduct a public hearing on 2008-09 budget plans approved by the school board and selectmen tonight Monday, March 31, at East Ridge Middle School auditorium, beginning at 7:30.
“We’re very eager to hear from the town regarding the proposed budget increases, and resulting tax increase,” said Board of Finance Chairman Marty Heiser.
“We would also be very interested in hearing opinions related to the two large capital projects, the enhancement of the police headquarters and the expansion of the library,” he said.
“This budget hearing allows citizens to express their support or concerns regarding budgetary issues, as well as allowing the elected officials to hear first-hand some of the concerns that they may have.
“It’s generally been a very informative evening and we encourage all taxpayers to come out and let their voices be heard.”
After Monday’s hearing the finance board will meet three nights in a row — Tuesday, Wednesday and Thursday, April 1 to 3, at 7:30 in town hall — to work on the budget to be put before voters for approval in May. Meetings are also scheduled, if needed, for the following week, Wednesday and Thursday, April 9 and 10.
Budget break-down
The budget sent to the finance board by the selectmen and school board totals $121,894,000:
- $76,712,000 for school operations, a 5.54% increase over this year;
- $30,713,000, a 5.15% increase from this year, for the selectmen to run town departments such police, fire, highway, recreation and town administration;
- $14,169,000 for debt service, a less than 1% increase;
- $300,000 for non-bonded road maintenance projects, a 10.2% decrease from this year’s $334,000.
“We’re going to be looking at the town budget and the school budget for economies of scale, to be sure that the taxpayers are getting value for their hard-earned tax dollars, while maintaining a school system that’s second to none in the state,” Mr. Heiser said.
Capital projects
In addition to their operating budget requests, which directly affect next year’s tax rate, the selectmen and school board also passed on to the finance board proposals for nearly $13 million in capital spending.
This would be paid for with borrowing — short-term notes and long-term bonds. The borrowing would not have much influence on next year’s taxes, but it would add in subsequent years to debt service costs, which are projected to remain at about $14 million next year.
Expansions of the police headquarters and library, together make-up about two-thirds of the capital budget:
- $4,250,000 for the renovation and expansion of the police station on East Ridge;
- $4 million as the town’s share of a $12 million proposed expansion of the library;
- $4,511,000 in other bonded projects and equipment purchases for the school system and all town departments.
Not since the passage of the $90 million “school bundle” of expansion projects has such a large amount of borrowing been put before the finance board.
“It’s a long time, since they had the bundle,” said Town Controller Jay Wahlberg.
In most years recently, he said, town officials have kept the capital budget requests in the range of $3 million a year, total. This year, there is about $4.5 million in more routine capital spending — a new tanker for the fire department, more asbestos abatement work in the schools, road drainage projects — and then the $4 million expansion and renovation projects are proposed for both the library and police station.
“We keep on postponing and postponing, eventually that’s going to surface,” Mr. Wahlberg said. “I think that’s what we’re experiencing now.”
Revenue projections
As for taxes, “as it stands now, the mill rate increase is going to be an impact of 4.25%,” Mr. Wahlberg said. That’s slightly below the 4.85% growth in requested spending.
“The difference between the expenditure and the mill rate is the actual growth in the Grand List,” Mr. Wahlberg said.
In their budget deliberations, both the school board and the selectmen recommended that the finance board consider drawing on the town’s $7.6 million surplus fund balance to hold down the tax increase.
If about $800,000 of those surplus funds were put into the budget as non-tax revenue, both boards pointed out, the finance board could reduce the needed tax increase to 3.5% — a number the budget planners liked because it was within the range of expected inflation.
Mr. Heiser said the finance board — which has responsibility for putting together the revenue side of the budget — would reach its own conclusions.
“It seems like everyone has already done the math,” Mr. Heiser said. “...I appreciate everyone doing that back-of-the-envelope calculation. We’re going to be going into the details. We’ve got to sit down and look at the numbers.”
There’s a lot more to the finance board’s revenue calculations than spending requests, tax rate and surplus, he noted.
“Another aspect of the budget that the Board of Finance spends a lot of time on is projected revenue,” he said. “And that relates to percentage of taxes collected, it relates to the amount of real estate transactions and the resulting flow of conveyance tax revenue. Also related is the interest income that the town gets from its short term investments,” he said.
“Unfortunately, some of that is less than expected.”
Revaluation
This is also a revaluation year. That means that tax assessments on all properties have been recalculated by the assessor’s office and a contracted revaluation firm. The procedure is required by state law.
The goal of the revaluation is to make taxes on different properties more accurately reflect their relative market values. It is not designed to increase overall revenue.
As in most years, a small tax rate increase — in 3%-to-5% range seems likely this year — comes on top of the revaluation changes, in order to finance whatever spending increase is approved.
But beyond that, the rate of taxation shown in the town’s “mill rate” will go down in proportion to the rise in the value of all taxable property as assessed on Grand List.
While nearly everyone’s assessments have gone up in revaluation, individual properties may bear relatively greater or smaller shares of the tax increase depending on how they did compared to other properties in the revaluation.
The general rule is that a third of properties will see assessments and taxes go up somewhat more than the general increase, a third will see taxes go up less than most of their neighbors, and a third will stay about the same.
Mr. Heiser, the finance board chairman, said he didn’t expect the revaluation would be a major influence on the board’s evaluation of the budget requests.
“No, essentially, the revaluation is a revenue neutral transaction from the Board of Finance point of view,” he said. “...It all works itself out.”
© Copyright 2008 by Hersam Acorn Newspapers
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