Friday, September 26, 2003
Finance Committee prepares for tight FY05 budget
As Carlisle put the finishing touches on the current budget (FY04, which started June 30) the Finance Committee breathed a sigh of relief · then launched into FY05. The FinCom's immediate task is to develop a "guideline" for the town budget which departments can use to plan for next year. Whereas historically the guideline was simply a percentage increase over the existing year's budget, Chair Lisa Jensen-Fellows said the FinCom is now committed to "conducting research to inform our guideline, checking with informed sources and looking at what history can tell us." She hopes to obtain more reliable numbers for each board's or department's revenues and expenses by the October 21 target for setting a preliminary guideline.
Small pie left for departments
Jensen-Fellows presented a first-stab analysis for the preliminary guideline budget. By looking first at uncontrollable fixed costs and revenues, she noted the committee could evaluate how much in discretionary funding was available to split among departments. Initially FY03 (fiscal year ended June 30) budgeted numbers were used, but will be replaced by FY03 actual numbers when they become available at the end of October.
The bottom line of the analysis: there is a very small pie of discretionary funds for level-funded departments to scuffle for. What remains as discretionary spending from a budget of nearly $19 million is between $146,293 and $194,028, depending on state aid. If the FinCom's assumptions for revenue and spending are accepted, a huge percentage of the town budget is relatively fixed.
Little control over revenues
Estimating FY05 revenues from property taxes and state aid as revenue sources is always difficult. Using an assumption of 7% growth in the tax base and $20 million in new growth (estimates provided by the Town Assessor), Carlisle can expect $15,948,336 from property taxes in FY05. As required by law, this analysis assumes no override of the Proposition 2-1/2% limit on property tax increases.
State aid adds another $1,600,812 to $1,648,547. This assumes that the SBAB (school building reimbursement) will be level, but that other state aid such as education, in lieu of taxes, and lottery will be cut from 0 to 5%. (There was some discussion that lottery money increases during a recession, so this estimate, now $177,824 to $187,183, may be adjusted).
Local receipts provide another $1,071,318 of which $752,653 is mo-tor vehicle excise tax, another revenue source over which the town has no control. Worried that townspeople will not be buying new cars in this tough economy, Jensen-Fellows suggested tracking the history of excise taxes when coming out of recession. Member Bret Bero countered, "I see no statistical evidence we are coming out of a recession."
One limited area of town control is the fees levied for building permits and other town services, most of which were increased last year. The result is an increase in revenue from fees, $169,000 raised in FY03 versus a budgeted $147,466. In addition, Building In-spector Bob Koning reports that, though new building permits are down, people are "renovating like mad," sustaining permitting activity.
"Level funded" government up 9%
On the expense side, fixed costs are creeping (and sometimes leaping) up, robbing departments of operational funds. Even funding departments at the same level as last year, a 9% increase is needed. This is primarily due to the cost of funding phase three of the wage and salary adjustments committed to by the Selectmen to make Carlisle competitive with other towns. Costs for reorganizing the town accounting function and increasing the legal budget were also considered "fixed" for the analysis. Bero noted that attention needs to be paid to unemployment insurance which could show "anywhere from a 40% to 159% increase." This item cost approximately $30,000 last year due to layoffs at the school. Another line item to be looked at was snow and ice removal, which overran its budget of $43,000 by $71,000.
Capital items, other expenses
The analysis set aside $250,000 for next spring's Warrant Articles that require funds. Deb Belanger, a member of both the FinCom and the Long-Term Capital Requirements Committee, suggested a policy of recommending a guideline of 1% of the total budget as a cap on capital expenditures. Capital items, plus line items for the auditor, veterans agent, and senior tax vouchers total approximately $225,000. CCHS is expected to present a Warrant Article for maintenance that will be several million dollars, although funding might not show up until FY06. Items for ballfields and dams may also be put forward for voter approval.
While it's difficult, and maybe impossible, to expect much accuracy in an early budget forecast, Jensen-Fellows believes there is value in having "defensible numbers." She adds, "We want to avoid what happened in Concord, where they went along with an estimate of state aid that was just unrealistically high." The FinCom will be putting in many hours this fall in an attempt to provide a guideline the town can believe in and support when budget hearings commence in November.
© 2003 The