Projects 2.5 Mill Tax Hike –

Finance Panel Forwards A Budget To The Council

By Steve Bigham

The Legislative Council’s finance committee Monday night reluctantly agreed to recommend a $72.2 million 2001-2001 budget to the full council. Its lukewarm approval of the plan stems from the projected tax rate increase of 2.5 mills (or nine percent) over the current budget.

As it is currently proposed, the 2.5 mill increase in the budget would cost a family owning a house assessed at $300,000 about $750 in additional taxes next year. Much of the 2.5 mill increase is due to a $1.1 million increase in debt service stemming from the proposed construction of the 5/6 school and the purchase of Fairfield Hills.

Under normal circumstances, the finance committee would not have recommended such a large increase. The committee members pointed out, however, that the 5/6 school is a serious need and buying Fairfield Hills is a once-in-a-lifetime opportunity. If taxpayers wish to go forward with these two projects then they will have to accept the big costs associated with them, the committee members observed.

“This year we can not put it off,” explained Legislative Council Chairman Pierre Rochman. “There’s just no way to put it off. We’re either going to build the school and buy Fairfield Hills or we’re not. If we’re not going to do these things, then yeah, we can keep our mill rate way down.”

In reaching its final recommendation this week, the finance committee was forced to cut back the Board of Education’s proposal by nearly $1.1 million. In doing so, the committee restated its insistence that operating budget increases be limited to 7.5 percent this year.

The school board had come in with a request amounting to an 8.5 percent increase plus another $718,000 in capital costs which it sought to have financed over several years. The finance committee was adamantly opposed to this idea, which would have put the town’s tax rate increase over the three-mill threshold.

“The 8.5 percent is $400,000 over the guideline. If we add in $718,000, that’s $1.1 million over the guideline,” noted finance committee chairman John Kortze. “I think we’re way out of line. I really do.”

Mr Kortze said he felt the original 7.5 percent guideline was “generous” and felt it was “crazy” that the school board asked for $32 million for a school and another very large amount in capital. The committee is also concerned that the Board of Education is now saying the cost of the school may actually reach $33 million.

“I’m more frightened than I was at the last meeting,” noted member Tim Holian, referring to the last time the finance committee met to discuss these excessive budget numbers.

Members Don Studley and Brian White argued without result that the council should also consider adding at least $1 million to the town’s capital reserve fund. The extra capital reserve appropriation would have hiked the budget increase to 12 percent.

Member Melissa Pilchard remained concerned that a 2.5 mill tax increase will not be supported by the public, even in this exceptional year. In an effort to bring the figure to a two mill increase or less, the committee sought to trim an additional $900,000 from the budget. It also looked at ways to lower the debt service and even considered putting off funding the Fairfield Hills purchase until next year. However, town officials are eager to package both Fairfield Hills and the 5/6 school for a vote in early May. Putting off Fairfield Hills until next year, they fear, may result in the plan getting turned down.

This week, Finance Director Ben Spragg began recalculating the borrowing package using current market rates.

“Interest rates have come down since I put the original borrowing package together. This will help bring the mill rate down some, but I have no estimate,” he explained.

The full Legislative Council will get its first look at the proposed budget at its next meeting February 21. It will then break up into committees to begin closer deliberation of each line item.