OLD LYME — The Board of Finance will present a fiscal year 2020-21 budget proposal of $38.96 million — a 0.13 percent or $54,217 increase in expenditures over the current fiscal year — at a teleconferenced public hearing on Monday, April 20 at 7:30 p.m.
Board of Finance Chair Andy Russell credited “conservative spending” for the modest increase, but said that the town’s tax rate will increase more significantly than its expenses due to a drop in assessed value of taxable property on the town’s most recent grand list.
The mill rate in the finance board’s 2020-21 proposal is 23.30, a 3.97 percent increase over the 2019-20 mill rate of 22.41.
A mill rate of 23.30 means taxpayers would be charged $23.30 for every $1,000 worth of taxable property in town that they own.
“Even though our spending has not increased, the available taxable property is down,” said Board of Finance Chair Andy Russell in a Thursday phone interview. “And our percentage of the school budget went up slightly even though their budget was down, so we’re still seeing an increase in our billings from Region 18.”
Old Lyme education expenses total $27.71 million in the 2020-21 proposal, which is 0.58 percent more than last year. Education accounts for 71.1 percent of the overall Old Lyme budget.
Even though this year Lyme-Old Lyme Schools’ Board of Education passed their first budget with a year-to-year decrease, Old Lyme has a larger percentage of the overall student population this year than it did last year. Therefore, Old Lyme has to pay a larger share of that budget.
In the 2020-21 proposal, the general government budget would be $9.81 million, which is 2.61 percent — or just under $250,000 — more than the current fiscal year.
More than half of that general government increase comes from debt service related to renovations at the Phoebe Griffin Noyes Library. The town’s debt expenses will increase $125,750, from $353,000 in 2019-20 to $478,750 in 2020-21.
In the proposal, the town’s capital expenses would decrease significantly — from $1.79 million in 2019-20 to $1.43 million in 2020-21. The 2019-20 capital budget included about $430,000 for Sound View sidewalks, which was largely offset by a Department of Transportation grant of $400,000.
Coronavirus impacts not significant so far, finance board chair says
Russell said that the coronavirus didn’t have much impact on how the finance board crafted the budget and that the board had nearly finished their budget before the state began shutting down services and businesses in mid-March.
He did say that the finance board had been considering increasing their expected tax collection rate of 98.25, which the town has outperformed in recent years, but the finance board ultimately decided not to do that while seeing the economic effects of the virus response.
“There may be more people that will have difficulty paying their taxes,” Russell said. “So we did not change our collection rate.”
The finance board’s proposal would also take $800,000 from the town’s surplus fund to mitigate the tax increase. The finance board took similar steps for the 2019-20 budget, but Russell said that the current economic downturn made it more important to do this year.
Russell said the town has a strong surplus — equal to almost a quarter of its annual operating budget — which is kept for the purpose of cushioning the town finances from sudden economic downturns.
“We are a tourist area,” he said, “so depending on what happens this summer, some of our businesses could be impacted significantly. We don’t have a crystal ball as to what may or may not happen but that’s one of the reasons why we like to keep a healthy surplus.”
Residents and taxpayers will be able to access the April 20 hearing by phone or computer. Access information is available on the town’s website. Russell said the public will be allowed to speak at the hearing after he makes his budget presentation.
“Usually there’s 10 or 12 people [at these annual hearings],” Russell said. “Something tells me there probably will be more people who will attend when they can jump online from the comfort of their own homes and not have to drive to town hall.”The finance board is expected to finalize the budget and set the mill rate at their meeting in the third week of May. As a result of Gov. Ned Lamont’s March 21 executive order, town budgets this year will not require voter approval at a referendum or town meeting.