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Appropriations Committee sees red flags with tax rate

Date: 3/5/2015

EAST LONGMEADOW – The Board of Selectmen at its Feb. 17 meeting discussed the fiscal year 2016 (FY16) budget with Appropriations Committee Chair Eric Madison, who stated the committee was “seeing some red flags” in regards to the proposed tax rate.

“Based upon the information that we have now, and though some of that is preliminary [and] we understand that we don’t know what the state picture looks like in terms of local aid and Chapter 70 money, but if we were to just level fund that and take into account the tax rate in town, [it] would climb,” Madison said.

The levy capacity would be increased to $21.66 per $1,000 on a residential property, he added. Currently, the town's tax rate is $20.72 per $1,000.

“I looked back in through some of our history and certainly in the last 25 years, probably well beyond the last 25 years, that would represent the highest tax rate that the town has seen in that time period,” Madison said.

Additionally, another aspect is that increasing the tax rate would bring the town closer to “that magical $25 per $1,000 cap,” which would mean that the town couldn't raise taxes beyond that point, he noted.  

“At some point, if we allowed that to happen, the pain would be great, frankly” he added. “The sentiment of the committee is that we really ought to start taking actions now. Let’s not kick the can down the road. It’s not a recommendation we want to make without the dialogue with you folks and other [committees].”

If the town were to maintain the current tax rate with contractual obligations and increases in mind, that would mean $708,500 reduction to FY16 appropriations, Madison said.

Board of Selectmen Chair Paul Federici said the town is looking for a “happy medium” between all departments when it comes to the FY16 budget. However, “the 400 pound elephant in the room” this year is that “basically every town contract is open for negotiations.”

“I’m assuming the better ideas aren’t going to be that great,” he added. “I know our governor is trying to, it seems, limit the effect on local aid, but I don’t think it’s going to go up. If we had last year’s [numbers] that would be a good thing.”

Madison said local aid would likely have little to no effect on the helping to maintain the town’s tax rate.

“I think the problem that we’re running into is that we're supplying services we can’t afford any longer,” he added. “At some point, I think we need to maintain quality employees. I think we have an obligation to our employees to pay them a fair market value, but I think at some point we have to reevaluate those services and those dollars in terms of what we can afford.”

Madison suggested continued dialogue between the Appropriations Committee and the board as well as other town departments to develop a “unified stance at Town Meeting as it relates to dealing with the town budget and ever increasing tax rate.”

“This isn’t going to be solved in this one budget year,” he added. “I think it’s going to be a series of things we do.”

Federici described the situation of the town’s tax rate as a “catch-22” with one aspect being that the town seeks to maintain quality services and affordability to residents, especially senior citizens, and another being fiscally responsible.

“You’ve got to weigh both of those and try to figure out in a perfect world how you can do everything, which sometimes you can’t,” he added.