Council Approves Tax Hike; Increased Expenditures

by Christopher O'Brien

By Chris O’Brien
The Town Council approved an 11.4% tax increase on Tuesday night. The mill rate rose from 22.68 to 25.27 and tax bills will be mailed to taxpayers in early July. Declining overall property values, a recent revaluation and a 2.74% increase in Education expenditures all contributed to the tax hike. “We didn’t take this lightly,” Council Chairman Dave Valletta told the audience just before the vote was taken.

Six separate votes were taken for separate components of the 2011-2012 budget. The Council’s three Democrats voted against approving the Mayor’s municipal budget and the new mill rate. No comment was made by any councilor on the Education budget increase, which passed unanimously.

Second term Councilman Charles Marsella led an effort by Democrats to postpone a vote on the budget to allow discussion of transferring money from the town’s Reserve Fund.
“We need to look at the revenue side of the budget, and we are anticipating a surplus from this [ending] year’s budget,” said Marcella. “We need to try to get the mill rate lowered any way we can to benefit everyone in town.” Marcella proposed approving the expenditure side of the budget, and then holding a workshop where the Council could ask the Mayor and Municipal Finance Officer Linda Bruce for funds from the Reserve Fund to offset the anticipated mill increase. He didn’t make clear if that discussion should take place Tuesday evening or over the course of upcoming weeks.

The Town Charter (sec. 704 (i)) requires that any recommendation to take monies from the Reserve Fund must be made directly by the Mayor. Thomas G. Dunn didn’t include any such provision in his proposed budget this year.

At the end of a fiscal year, unspent funds are automatically deposited into the Reserve Fund Account. The fund can be used in case of an emergency, for capital expenses, or unforseen circumstances, such as overtime in the case of a storm or other disaster. If there are no funds in reserve, the town would have to bond money. Some mayors have also used it in routine budget planning. Evidently, the town ran out of money at one point during the 1990s and Mayor Migliaro requested money from the State Legislature at the time to bail out the town.

Yet, Republicans weren’t biting.

“I don’t think we have alot in the rainy day fund that would allow us to tap into it,” replied Gale Mastrofrancesco. The fund is currently has $2.5 million.

Jeffrey Slavin and Roger Picard jumped on a suggestion by Marsella that the economy may be improving, suggesting that next year’s revenue could rebound on its own. “I don’t think its improving enough,” Picard said, citing job numbers that were released by the federal government this week. Slavin was more pointed. “Jobs are not coming back to this state. People are leaving! I agree that it a tough time.”

Marsella pressed his case though, noting that the fund balance was around only $50,000 several years ago. “We need to at least try,” added James Pape, supporting a review before voting to finalize the mill rate. Marsella suggested that funds transfered from the fund balance could be as small as “$250,000 or 500,000”. “If we tweeked it a little more, I think we can bring the mill rate down a little – even if just a little,” said Marsella.

According the Town Charter, Section 703 says that an “operating budget” must be approved at least 20 days before the fiscal year begins on July 1st. It doesn’t refer to whether the revenue budget is required under the same schedule.

Republicans were unpersuaded, however. “I brought up this idea at the workshop (last week).” said Don Charette. “And there was no comment. It was dismissed,” referring to tapping into the reserve fund. Democrats acknowledged that no plan was made at the time, but that shouldn’t preclude it from being reconsidered.

Mastrofrancesco reminded council members “To let the well run dry and have nothing left if something happens is irresponsible. We’d have nothing left to tap into if we need it.” Chairman Valetta added “If we didn’t get FEMA funding (for the October storms), we’d be in the red (this year).”

Just before the vote was taken, the Council asked Municipal Finance Officer Linda Bruce if the fund balance could affect the Town’s bond rating. Bruce advised the Council that town finance consultants have suggested that the town should have $5 million in reserves.

Republicans approved the budget on a 6-3 vote.

“We could have discussed (the fund balance). I was ready to, but wasn’t called on. At the same time, you would need quite a bit to make a dent in the mill rate,” Dunn told the Whisper after the vote. “I’m upset at the mill rate going up. It was a tough thing.”

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