Town could reach residential tax limit within next five years

Oct. 1, 2015 | Chris Goudreau
cgoudreau@thereminder.com

Finance Director Paul Pasterczyk told the Select Board during its Sept. 21 meeting that if current budgetary trends continue the town would be faced reach its $25 per $1,000 of assessed value tax limit for residential properties within the next five to six years.
Reminder Publications photo by Chris Goudreau

LONGMEADOW – Finance Director Paul Pasterczyk told the Select Board during its Sept. 21 meeting the town could reach its residential tax rate limit of $25 per $1,000 of assessed value during the next five to six years if current budget patterns continue.

Pasterczyk presented information on the fiscal year 2017 (FY17) budget assumptions, which included an estimated residential tax rate of $24.72.

“The amount that is applicable for that $25 amount would be just shy of $23,” he added. “This number will change as certain values are known – those values being our FY16 evaluation [and] our FY17 evaluation.”

The FY15 tax rate was a split tax rate with a commercial, industrial, and personal property tax rate of $26.13 per $1,000 of assessed value and a residential and open space tax rate of $23.62 per $1,000 of assessed value. The Select Board has yet to set the tax rate for FY16.

Pasterczyk said he also anticipates the town would utilize its full levy capacity and a low amount of reserves in FY17.

Town Manager Stephen Crane said if he were left with a decision to issue a directive on the FY17 budget, he would only increase it by 2.25 percent from the previous fiscal year.

He said he believes the directive wouldn’t result in “draconian” cuts. Under Proposition 2 1/2, the town could increase the budget by 2.5 percent in FY17.

“[We] would see what that looks like and ask departments to specify what services or positions would be cut to reach that number and then make the decision based on that,” he added.

Crane said an alternative method would be to scale back budget percentages on capital contributions.

Selectman Mark Gold said he agreed with Crane’s ideas, but budgetary exercises in the past have resulted in angst from town employees.

“I think that if we’re going to do that, prior to creating that angst, we need to have kind of an understanding that it’s more than just a paper exercise … We’re so heavily in financing of personnel that it’s likely that those cuts end up as people cuts,” he added.

Crane said the town’s issue with its tax rate is not because of profligate spending, but due to a lack of increased assessed values of properties within the town.

“We need to take a thoughtful approach towards this effort,” he added. “I’m not going to say it may be undoable – everything is doable – it’s just what are you going to set the priorities for and what do you want to sacrifice?”

Selectman Alex Grant said he would like to see the town develop a level-service budget in FY17.

“In principal I agree with you, but this issue with the mill rate limit is a real thing and it is coming,” Crane responded to Grant. “I agree with you, we don’t want to make unnecessary cuts, but we don’t want to not take it seriously and then end up in fiscal year 2021 or 2022 and then realize that we’ve that because we’ve hit this cap … we are going to be making deep cuts. Town services one fiscal year to the next would be vastly different.”

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