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Finance Committee Finalizes Override
Recommendation
Fourth in
a Series of Commentaries by the Finance Committee
The
Finance Committee has attempted this year to consolidate a subtle
but important shift in its approach to building the town’s FY04
Operating Budget. We began the process, and have asked each of the
town’s four principal Budgeting Agencies to likewise begin, with an
examination of the town’s available revenues, rather than a
stipulation of its needs. Initial budgets were all built to a
no-Override premise in an effort to ensure the most responsible
budgets possible in the event of such an outcome. This focus, we
hope, has sharpened our understanding of what services are most
essential and put the burden on policy-making boards to identify
those service restorations, additions or improvements that they
believe merit an override.
The Finance Committee began the development of the FY04 Budget last
summer, with an examination of town revenues and necessary
expenditures called the Funds Available Analysis (FAA). This
analysis represents the Finance Committee’s estimation of likely
revenue from all sources, subtracts those expenditures the town is
obliged by law to make (e.g., debt service, pensions and insurance,
NESWC contract), and yields the percentage growth (or
reduction) in discretionary spending required to achieve a No
Override Budget, or what we call the Base Budget
Based on this analysis, the Finance Committee issued its Budget
Guidelines in September, directing all Budgeting Agencies to build
their Base Budgets to an amount originally calculated at 0% but
later revised to 1.8%.
Budgets whose growth is limited to zero or even to 1.8% are
obviously not status quo budgets.
As each policy-making board has
built its Base Budget for FY04, it has had to rethink its core
services in order to identify what economies were most desirable or
least undesirable. The Finance Committee’s Budget Guidelines also
requested that each Budgeting Agency identify service restorations
or improvements which would warrant an individual Override Request,
but only after each of them had created a Base Budget that met the
no Override criterion.
In a series of public meetings with each of the
principal Budgeting Agencies throughout the fall and early winter,
the Finance Committee has reviewed each agency’s Base Budget and
their individual Override Requests at length and with great care.
Based on this review, it is the Finance Committee’s recommendation
that the town adopt an Override in the total amount of $350,000,
apportioned as follows:
$97,000 for Town Operating, an amount
which is 1.9% over its Base Budget and which represents a total
growth of 3.7% over FY03;
$11,000 for the Library, which represents l.8% over its
Base Budget and total growth of 3.6% over its FY03 appropriation;
$185,000 for the K-8 School, equaling 2.5% over its Base
Budget and total growth of 4.3% over FY03; and
$57,000 for Lincoln-Sudbury Regional High School, which is
3.2% over its Base Budget and represents 5.0% growth over LS’ FY03
assessment.
In regard to the LS portion of the
proposed Override, it is important to note that because the
assessment formula reflects enrollment shifts between the two towns,
the 5% figure corresponds to an overall budget increase at the high
school of less than 3%. It is also important to note that a budget
increase of this amount depends on the success of a Sudbury
override, although it is possible that Lincoln will contribute this
portion of its override to LSRHS regardless.
In arriving at its Override recommendation,
the Finance Committee has sought to balance three risks:
1.
the risk that state and/or local revenues, despite our careful
calculations about presumed State Aid reductions, will fall short of
expectations;
2.
the risk that resources available to policy-making boards would be
insufficient for them to provide leadership and services
commensurate with the town’s standards; and
3.
the risk that the tax burden imposed by the Override would be
unacceptable to taxpayers.
If one assumes that the average assessed value of a Lincoln home is
$875,000, the town’s Base Budget for FY04 will increase the average
homeowner’s tax burden by about 4%, or roughly $339 more than that
homeowner’s FY03 tax bill. An Override of $350,000 results in an
additional tax increase of 2.2%, or $192 more on that average home’s
tax bill, for a total increase over FY03 of 6.2%, or $531 total
additional dollars. The CPA surtax will add another $107 to that
average increase, for a total average increase of about $638.
Given the tax increases of the last several years, and the
probability that similar increases and overrides will need to be
sought in the future, the Finance Committee believes that there are
several items that require immediate and sustained attention.
1.
The first concerns tax relief, where the Board of Selectmen’s
important first steps are currently stalled at the State
Legislature; action on the pending legislation and expansion of
available relief need to be high priority items.
2.
Secondly, the Finance Committee believes that the town needs to
exercise constant vigilance about the costs and benefits attendant
on new growth, including the service and tax implications for the
town of hostile 40B housing development.
3.
Thirdly, because of uncertainties regarding State Aid both now and
in the future, and because of the town’s heavy reliance on the
property tax, it is important to regularly and rigorously review and
assess potential new revenue sources.
4.
And finally, the Finance Committee believes that, whatever the
general economic climate, extending the town’s planning horizon will
help minimize extreme shifts in budget size or tax impacts. To that
end, the Finance Committee will seek to renew its three year
approach to budget planning in Fiscal Year 2005.
In the weeks between now and Town Meeting,
please look for the FY04 Budget Road Show, coming soon to a venue
near you!
The
Lincoln Finance Committee
Susan Brooks, Co-Chair
Paul Giese, Co-Chair
Mary Cancian
Pat Phillipps
John Robinson
Al Schmertzler
Robert Steinbrook
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