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The $3 million surplus shell game

This year’s budget for Charlestown contains $3 million of the surplus money that is being moved around under 3 shells.

Let’s look at these shells.

Shell #1 contains $1.2 million from the surplus fund that will be used to reduce the tax rate from $9.23/ 1000 to $8.20 /1000. This is a good thing. This is our money that we paid. Since it is not needed to run the town, we should get it back.

This money can be safely used. Last year’s approved budget included $845,000 that was specifically placed in the surplus and the Town is on track to realize additional savings. This $1.2 million will be replenished.

However, don’t be fooled by this tax “reduction”. While the Tax Rate appears to be going down, the total Tax Levy is going up and many taxpayers, especially those north of Rte 1 will actually see an increase in their tax bill. This is because of the recent Statistical Revaluation. Many residents north of Rte 1 saw a large increase in the assessed value of their property, so even with a rate of $8.20, some will still pay more.

Shell #2 contains $1 million for the police pension. Pensions are extremely important and should be funded. This year’s budget includes police pension payments of $575,313 and municipal pension payments in the amount of $224,218. For a total of $799,531. The $1 million is an additional payment to the state.

With the state facing huge budget deficits and the financial markets being so volatile, now is not the time to be voluntarily handing over $1 million to the state. Recent reports indicate the state is looking at an $800 million shortfall. Our $1 million should remain where it is now through an abundance of caution, safe in our own account. The state’s pension fund relies on investments in stocks and bonds. This does not seem like the time to risk our pensions in the market. If left in the surplus, the money will still be available next year when the financial situation has hopefully stabilized. Let’s be cautious and not risk our money.

Shell #3 contains additional payment of items above and beyond both department and Town Administrator requests. Every year, the Town’s departments submit their budgets. This year’s budget pays for items that do not need to be paid this year, nor were these additional payments requested by the departments or the Town Administrator.

For example, we are paying $203,797 more than what is required for vehicle payments. During this difficult economic time, I don’t know of too many people that are paying extra on their bills. Instead, they are reducing their spending. There is an additional $124,651 going to the legal reserve which already has close to $400,000 in that account. There is an extra $75,000 in the budget for pond dredging, on top of the $250,000 that was requested by the department and is already included in the budget. Also, $35,000 is not needed and can be safely removed from the Revaluation fund along with an additional $125,000 for a Denitrification Prototype. Only $125,000 was requested by the Town Administrator, but $250,000 is in the budget for this year.

Here’s some additional information people should know. If the Charlestown Citizens Alliance (CCA) had been successful last year with their $3.1 million community center, then this $ 3 million would not even be available this year.

The $1.2 million would not be available to reduce the tax rate. We would be facing large increases in our tax rate due to the property revaluations and revenue reductions from last year’s budget. We should not forget, last year’s original CCA budget did NOT include a tax reduction. That came from the revised budget following their failed budget. Remember, the CCA Budget for Fiscal year 2019-2020 had our tax rate set at $9.64/ 1000. Imagine how much we would all be paying in taxes if they had been successful.

We continue to hear from the CCA that they are fiscally responsible. Let’s further look at their fiscal responsibility

From 2014 - 2019, Charlestown’s surplus grew by $5 million dollars. That’s an increase of $1 million per year for 5 years. During that time, our tax rate and our tax payments increased every year.

A surplus is a good thing, but if the intent was to grow the surplus by $ 1 million/ year, then they should have been honest with us and let us know that our taxes were increasing every year to grow the surplus. Obviously this was not the case.

Last year, the CCA majority on the Council decided that the Town had too much surplus. Their plan for this money was to spend $3.1 million on a community center that they had no plan for. At no point during last year’s original budget discussion did they consider a tax decrease.

At no point during last year’s original budget discussion did they consider putting additional money in the police pension fund. In fact last year CCA Town Council members advocated against including additional funding for police pensions.

So what can be done. We can vote down this budget. We can tell the Council 1) we want to use $1.2 million to reduce the tax rate, 2) we want to protect our $1 million by keeping it in the Town’s account, rather than risking it with the state during this time of financial upheaval and 3) we want to remove the almost $800,000 that is not needed this year and instead keep that money in our own pocket until a survey is completed.

It’s a good thing last year Charlestown’s voters saw through the CCA’s ploy to spend $3.1 million of our money on a project that they wanted. Otherwise we would be in a less flexible financial position. No one wants to go through the process of redoing the budget, but we are in uncharted waters and that demands caution in our fiscal affairs.

Holding onto our cash while the current economic crisis plays out is both conservative and financially prudent.

Deborah Carney, Vice-President, Charlestown Town Council

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