With less free cash on hand this year, and without some of the one-time money the town has used to fund budgets in the past, Southborough Finance Director Brian Ballantine told selectmen last week there’s little chance of avoiding a tax increase next year.
“It’s going to be another tight year,” Ballantine said.
After running the numbers, Ballantine told selectmen taxpayers are looking at a 1.65% property tax increase even if budgets are level-funded next year. That’s because the town’s free cash levels have decreased by about $300K since last year, and one-time sources of money like the overlay reserve fund are essentially tapped out.
Chairman John Rooney said planning on zero budget increases for next year is unrealistic given the town’s contractural obligations. Four town union contracts, including police, fire, and clerical, are up for renegotiation this year. Teachers have one more year remaining on their contracts.
Ballantine said the challenge this year will be coming in under an amount that would trigger a Proposition 2-1/2 override vote. He projected if all town and school budgets increase by 2.5%, it will bring the budget very close to the cap. A budget increase of that level would translate to a tax increase of about 4.21%, or $360 annually for the average Southborough homeowner.
Selectman Dan Kolenda said everything should be done to avoid an override vote, which he predicted would not pass given the fiscal mood of taxpayers.
Selectmen agreed to ask department heads to put together level-service budgets to start with. Because services often cost more to provide year-over-year, level-service budgets for next year will be on average higher than they are this year.
“The reality is, if we want to maintain our quality of schools, quality of public safety, and quality of public works, there’s a cost to that,” Rooney said.
While asking for level-service numbers, selectmen left the door open for departments like police and the schools who may think they are currently under-funded to argue for increased services, but warned it would take some convincing.
“Departments will have to come up with a very strong argument if they need to go above level service,” Selectman Bill Boland said.