Under the proposed budget, EGSD would get $600,000 less than requested
Town Manager Andy Nota has presented a total $76.5 million budget for fiscal year 2022 (beginning July 1), which represents a 2.94 percent increase over the current budget. This is a starting point, with the budget now going to the Town Council to consider, beginning with a virtual budget hearing Thursday, May 13.
In his letter on the budget, Nota writes that “the circumstances surrounding [the budget’s] development could not be more uncertain than they have been during the months leading up to this point in time.”
In a recent interview, he acknowledged that compared to last year’s dire uncertainties, things are improving, but said there was still a lot of uncertainty. “The economic conditions should be improving here, but we’re still in COVID.”
A big part of the improving economic conditions is the upwards of $4 million in federal stimulus that will be coming to the town over the next couple of years. But, Nota said, municipalities still don’t have guidance from the U.S. Treasury on how exactly the stimulus can be used.
Last year, Nota’s budget for this year was extremely conservative, he said. “We consolidated; we constricted.”
That can’t continue without a significant hit to town services. So the proposed budget restores some of those cuts.
A complicating factor in all of this is that this is a revaluation year and new property values are up an average of 14 percent. That means tax rates are coming down – for residential homeowners, the rate will go from $23.43 to $21.77 per $1,000 assessed value, a decrease of $1.66. You might see no tax increase at all if the increase in value of your home was in the 7 percent range (and you’d see a tax decrease if your property value rose less than that). But if your house was valued at $500,000 for FY2021 and the value rose that average 14 percent (i.e. your house value is now $570,000), your tax bill will increase by around $700.
Nota’s budget includes $38.1 million for EG schools. That’s an increase of $500,000 over last year’s tax transfer but a decrease of $600,000 from what the School Committee asked for in its budget.
The school department did not include any use of its fund balance (i.e. surplus) in its 2022 budget request to help offset expenses (it included more than $500,000 this year) and Nota said the district needed to use some. He noted the town was planning to use $600,000 of its fund balance for its budget and that the school district will be getting a (long-anticipated) return of around $1.5 million from their former health insurance collaborative. He said the district also was on track to have several hundred thousand dollar surplus this year.
Surplus funds are saved for the proverbial rainy day. There can be a difference of opinion how much money should be kept in a surplus account. With as much as $2 million in unassigned fund balance, Nota said, the district had to use some of that to help the overall budget.
He is recommending the district cut $200,000 in expenditures – they could find two or three times that amount, he said – and use $400,000 from fund balance, for a total of $600,000 less from the town.
“The School Department, albeit the largest department and as important as it is, is one of many departments in town. You need to be fair to everyone,” Nota said.
This is not the final word on the matter. In fact, residents are invited to weigh in at Thursday’s virtual hearing which starts at 6 p.m. (find the agenda and Zoom link HERE), or you can contact Town Council members directly (find emails HERE).