FREEPORT — The proposed fiscal 2010 budget is down about $71,000 from this year, but reductions in state aid could result in additional budget cuts and tax increases.
At Tuesday’s Town Council meeting, Town Manager Dale Olmstead said the proposed $18.4 million total town budget could be reduced by an additional $40,000 by the end of the week based on state proposals. If that happens, he said the town cannot hold the municipal tax rate at $3.11 per $1,000 of assessed value.
Currently, the proposed $3.9 million municipal portion of the budget meets the council goal of maintaining the current municipal tax rate and preserving staff levels, but Olmstead said that, too, could change in light of state funding.
“We need a buffer for the nasty things to come,” he said. “We could hold the tax rate stable, and still create a fund to buffer for the future.”
The budget was presented with a 15-cent decrease in the property tax rate, or $12.60 per $1,000 of assessed value. But Finance Director Abbe Yacoben said Wednesday morning that based on state uncertainties, it will be dificult to know if that number will hold.
“We felt so pleased when the operating budget was presented and made public, and now there are these changes a few days later,” she said. “It may make sense to keep the tax rate from last year, and try to create a safety net.”
Olmstead said if the Regional School Unit 5 budget remains constant – which he does not expect – the budget could see a slight decrease in the tax rate from this year. If that is the case, he suggested creating a “rainy day fund” to offset reductions and shortfalls expected in fiscal years 2011 and 2012.
Olmstead said revenues are all down, including state revenue sharing, homestead exemptions reimbursements, state road aid, and planning, building and new construction fees.
“We watch for new value in March, April and May,” he said. “That’s when plans are approved and building permits are taken out. We have seen two building permits for single-family homes, where last year at this time we saw 35 to 40.”
Olmstead said the challenges facing the budget include the general economic downturn that may continue for the next few years, and stimulus funds evaporating after two years. Other challenges to the budget include the RSU 5 cost-sharing formula and citizen initiatives for excise tax reduction and school consolidation repeal.
He said opportunities that could help the town would come in the form of consolidating services.
“I don’t like the idea of it, but it a necessary evil,” Olmstead said. “We could reduce our costs by sharing services, and in addition to dispatch, we should look at police, fire and administration.”
Residents can bring budget questions to town staff on Wednesday, May 6, from 5 p.m. to 6:15 p.m. and on Thursday, May 7, from 7:30 a.m. to 9 a.m., in council chambers.
There will be a council workshop on the operating budget Tuesday, May 12, and a council meeting Tuesday, May 19, at 7 p.m. On May 26, there will be a workshop on the proposed 2010 budget, followed by a meeting to adopt the budget. If more time is needed to deliberate, June 2 is reserved as an alternate budget adoption date.
To see a copy of the fiscal 2010 operating budget visit the town Web site.
Amy Anderson can be reached at 781-3661 ext. 110 or firstname.lastname@example.org