Projected Town Surplus Shrinks

By Steve Bigham

News of a surplus usually comes as good news, but the Town of Newtown is reporting a surplus that is much smaller than the previous year’s.

According to Finance Director Ben Spragg, the town’s leftover money from the 2000-01 operating budget was $1.9 million, nearly $900,000 less than the year before. A year ago, the town reported a surplus of $2.7 million.

Fortunately, the effect on next year’s budget will be minimal. Town officials are careful not to use 100 percent of any surplus to offset taxes in the following year’s budget. Some of the surplus is put into the town’s reserve fund to pay for large, non-recurring expenses that would likely cause the town’s tax rate to increase more dramatically year-to-year.

Mr Spragg said using all the money to keep the mill rate down would cause problems during next year’s budget season as budget makers would have to raise taxes simply to maintain the status quo.

“The Legislative Council has created a system of putting a portion of the annual surplus into the cap non-recurring expenditure fund, so in the budget that we’re in, the council is putting in 1 million of the 2.7 million in capital reserve,” Mr Spragg said. “The difference – $1.7 million – is actually being used to fund the 2000-02 budget. When we end this fiscal year with a $2.2 million surplus, it’s not a problem because the council only used $1.7 of the $2.7 in budget for revenue.”

The decrease in surplus, according to Mr Spragg, is due to both the slowing economy and better budgeting.

“The estimates [for revenue] were closer,” he explained.

The finance director said his final year figures are still just estimates. Concrete numbers, including the results of an audit report, are not due out until later in the year.