top of page

REPUBLICANS: THE PARTY OF YES AND KNOW

Democrats Claim the Last Town Council Used Fund Balance to Offset Taxes and They are Wrong

 

This Town Council claims the last Council improperly used General Fund Balance but they don’t know what they are talking about.

 

When the pandemic hit in March of 2020 and our schools and businesses began shuttering with no real plans for re-opening the Republican led Town Council had to respond.

 

Because we had no information about how the pandemic would impact state revenues and our taxpayers we put in place a plan to respond. The first thing we did was look for ways to reduce our expenses. We held open a vacant police officer position and cut back everywhere we could reasonably do so – understanding that our taxpayers may need our help more than ever.

 

When we set the budget we recognized that we should not expect to collect the same percent of taxes because many of our businesses had closed. At this point there was no plan for the federal government to provide any Covid related assistance.

In May 2020, we manually lowered the projected collection rate – meaning we did not use the formula to determine the collection rate that we have built into our financial plans and have used for years. Once the budget was amount was set, lowering the collection rate resulted in projecting we would collect about $256,000 less in revenues and resulted in our raising the mil rate to offset the expected lost collected revenue. In order to help our taxpayers shoulder this unimaginable crisis, we chose to set aside up to $300,000 from the general fund to allow us to basically offset the increase in the mil rate that was necessitated by purposely lowering the

expected collection rate. We did not spend this money. It would only be used if we actually realized reduced tax revenue collections because of the pandemic. If we were able to maintain our usual collection rate we would not see a real reduction in tax revenues.

By the end of FY 20/21 we did not see any need to use general fund money because our tax collections had been very close to our typical year and we realized some savings from operations. In the end our fund balance actually grew by the end of the year.

In the following year, FY 21/22 which we are now in the fact that we raised the mil rate to offset the projected lost tax revenue due to covid meant we were still raising close to the amount of tax revenues needed. Our Covid financial plan was to be in place for up to three years. The plan was to set aside up to $200,000 from the general fund in the second year. Because we had raised the mil rate to offset the changed collection rate in 20/21 and because we were now able to return to the typical collection rate (which projected generating more than the $256,000 from the prior year because of grand list growth) we are actually in good shape and are not expected to use any of the general fund balance this year either. We expect the grand list to continue to grow.

 

The original Covid financial plan called for setting aside up to $100,000 in FY 22/23 if it was needed. We are now back to our historic collection rates and there is no need to believe we will need any of this $100,000 in FY 22/23. In fact, due to historic inflation and increase assessments of our motor vehicles we will generate at least $1.1772 M in additional tax

revenue in the coming year – without raising the mil rate. There is obviously no need to artificially lower the tax revenue needed by $100,000 in the coming year. There will be no shortfall and we are seeing a massive increase in tax revenues. So why are the Democrats doing this?

 

All of these financial plans and gyrations did not and do not change the budget that was passed at referendum each year. They only impact the mill rate that the Town Council set for each of these 3 years.

 

The current Democrat led Town Council has been lying to our taxpayers telling them that we used $300,000 of our general fund last year and that we will use $200,000 of general fund monies this year. As I said, we actually grew our fund balance last year and did not use any of it

to offset taxes and we are projecting that the fund balance will continue to grow this year as well.

 

Don’t believe the Democrats when they slander the past Council with these false claims. They are either lying or they really don’t understand how the collection rate affects our mill rate –and that is scary too. Now they are using these false claims to artificially keep their large tax increase from being even higher.

bottom of page