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Budget revision lowers the tax rate

July 2, 2011

BURRILLVILLE - The Town Council Wednesday adopted a revised town operating budget for fiscal 2012, which now reflects a slightly lower tax rate than the one approved by the council on June 13.
When the council adopted the budget on June 13, the panel set a tax rate of $16.16 per $1,000 assessed valuation, which would have resulted in a 50-cent net increase per $1,000 of valuation over this year's $15.65 tax rate, and which would have equated to a roughly $250 annual tax bill increase on a home valued at $200,000.
At Wednesday's meeting, the council was asked by Town Manager Michael Wood and Finance Director John Mainville to revise the budget based on new state aid figures as reflected in the House budget passed last week, as well as school grant money that needed to be included in the total budget resolution.
During the meeting, Councilwoman Margaret "Peggy" Dudley proposed keeping the tax rate at $16.16 and taking $25,000 that it would generate and put it into the general contigency fund to help pay for unexpected oil and fuel costs next winter and to adjust the salaries for town administrative and library personnel who haven't had salary increases in three or four years.
That proposal, however, was not supported by Councilmen Stephen N. Rawson and David Place, who proposed that the tax rate be lowered to $16.15 per $1,000, which represents a $2 tax bill difference between the two rates.
"A penny doesn't sound like a lot, but $2 is $2," said Rawson. "If we have the opportunity to save a penny, let's save a penny."
To pass the budget resolution, the seven-member council needed at least six affirmative votes so with Rawson and Place casting the dissenting votes, Dudley's proposal failed by a vote of 5 to 2.
After a brief recess, the council came back and debated a counter-proposal, which proposed a tax rate of $16.15 with $12,000 to go into the general fund contingency fund. The vote on that proposal was 5 to 2, with Place and Councilman Edward Blanchard casting the dissenting votes.
Blanchard later rescinded his vote, but not before expressing his belief that the tax rate should stay at $16.16 to avoid financial problems next year.
With Place the only dissenter on the proposal, the motion to revise the budget passed, as did the general motion to adopt the revised budget.
A few weeks back, Wood had proposed a $43.4 million budget for fiscal 2012, which was $314,759 lower than the current fiscal year budget, according to information released by the manager's office last week.
Included in the overall budget was Wood's proposed $26.9 million school budget, which is level-funded to the current year.
Wood's recommended budget, which was within the state's 4.25 percent levy cap, included a municipal operating budget of $9,509,093, which represented a $242,425 increase over the current year.
That increase was driven by several factors, including an $180,663 increase in health insurance benefits; a $25,800 increase in retirement costs; and a $24,000 hike in rubbish and recycling collection costs.
The school budget was proposed at $26,909,194, which was level-funded to the current year. Although there was no recommended increase, the proposed school spending plan represented $44,261 over the maintenance of effort requirement.
A challenge facing the town next year is the fact that the town's tax treaty with Ocean State Power will expire. The current tax treaty expires this year, and negotiations are underway to draft a new payment in lieu of tax (PILOT) agreement treaty. At its peak, the town received $5 million per year from the original 20-year agreement. The expiring agreement ratchets downward and is $1.5 million in the final year this year.

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