Guilford budget would raise tax rate nearly 7%
Published: Saturday, April 4, 2009
By Rachael Scarborough King, Register Staff
GUILFORD — Town officials are projecting that the tax rate will rise nearly 7 percent in the next fiscal year, although the budget increase is just 2.2 percent overall.
The tax rate is projected to rise from 19.19 per $1,000 of assessed value to 20.51, an increase of 6.88 percent.
The Board of Finance has voted to send a $77.12 million 2009-10 budget and nearly $3.36 million in bonding expenditures to voters. The budget referendum is scheduled for April 21, and the town budget meeting is Tuesday.
The town has proposed a $27.28 million budget, which represents a zero percent increase from the 2008-09 package, while the Board of Education’s $49.84 million budget includes a roughly 3.5 percent rise from this fiscal year.
The projected tax increase is due to a reduced revenue forecast and a decision not to rely on the fund balance, Finance Director Sheila Villano said.
For many years, Villano said, the town has been using money from the fund balance — the difference between revenues and expenditures that can be set aside for future use — to support operating expenses in order to keep taxes low.
“This (drawing money from the fund balance) really isn’t a good budgeting practice, but when you eliminate it, you’re automatically going to see a mill-rate increase because it’s like lost revenue,” Villano said.
Last June, the fund balance totaled about $2.5 million, and Villano said she expects it to be lower than that at the end of this fiscal year because of a recent decline in revenues from interest, building permits and conveyance fees. This fiscal year, the town budgeted $1.2 million from the fund balance for operations.
Villano added that an adjustment to the grand list because of an increase in the cap for the Elderly Tax Relief Program has also affected the projected tax rate.
First Selectman Carl Balestracci said the town was told by two bonding agencies that it should reduce use of the fund balance in order to maintain a high bond rating.
“As we do every year, we’ve got bonding that we need to do and we don’t want to pay more interest on that than we need to,” Balestracci said.
Selectwoman Cynthia Cartier, who has been on the board since 2007, said she voted against the budget last year in part because of the reliance on the fund balance. She voted in favor of the 2009-10 proposal.
“For the past three years, we have dipped into the fund balance just to pay bills,” Cartier said. “Even though we would have faced some challenges now due to the national economic climate and the state economic climate, I think we could have better prepared for this if we had implemented more efficiencies a few years back.”
On Monday, the Board of Finance approved a bonding package with three items. The first would appropriate $810,000 for a firetruck and a public works truck; the second is to spend $1.55 million to repair the roofs at Calvin Leete and Guilford Lakes schools; and the third would authorize spending $998,750 on health and safety repairs at Elisabeth C. Adams Middle School.
The town budget meeting is set for 7:30 p.m. Tuesday at the Nathanael Greene Community Center. At the referendum, voters from all five districts will vote at fire headquarters at 390 Church St.