FEMA uncertainty likely to raise tax rates

Friday December 7, 2012


Staff Writer

BENNINGTON -- Next year's town budget is expected to raise the tax rate by 2 to 3 percent because of cost of living increases and uncertainty around reimbursement for expenditures related to Tropical Storm Irene.

Bennington Town Manager Stuart A. Hurd is working with his staff on next year's budget plan and hopes to deliver a first draft to the Select Board on Dec. 17. The initial budget will likely show the 2 to 3 percent increase in the tax rate, he said.

"I'm trying to focus on a 2 to 3 percent increase in the overall tax rate. The overall might be higher because the cost of things has gone up," he said. "We're going to try and hang the tax rate around the cost of living increase."

The Select Board has pushed for level-funded budgets in recent years as the country entered and slowly emerged from a prolonged economic downturn. The town budget in recent years has limited expenditures on some infrastructure needs.

Hurd said the Select Board has not asked for a level-funded budget this year. It would not be prudent, Hurd said, and residents have indicated their willingness to invest in infrastructure needs by approving additional spending on road work at the ballot box.

"This year, actually, I haven't heard them ask for that specifically. So, I'm hoping that what I'm working on is going to be satisfactory. I think they understand," Hurd said. "People understand that we need to continue improving our infrastructure. The board has recognized that by increasing rates for water and sewer."

Complicating matters is the unanswered question of whether the Federal Emergency Management Agency will reimburse the town for about $4.2 million dollars the town spent on emergency work following Irene. Town officials say they are confident FEMA will provide most, if not all, of the funds. But so far, FEMA has yet to issue a final decision.

The town will need to begin budgeting for paying back a $5 million line of credit it secured for the river restoration work.

"Obviously this year, I think level-funding is probably not possible. Part of it is the uncertainty because of the FEMA expenditures," Hurd said.

Hurd said he is crafting the budget with department heads the same way as previous years. "We always use a zero-based budget process. You're starting from zero and building from there," he said. "That's always the process."

It's possible the finished budget will cause a tax rate increase greater than 2 to 3 percent. In that case, Hurd said he will seek additional revenues to offset the additional increase. There could be some increase in the grand list because of sizable projects by Price Chopper and United Counseling Service, he said. However, it would take an additional $3 million in additional property value to impact the tax rate.

Other revenue may be found in increased recreation center memberships and building permits, Hurd said. "Those things, as people have more money and are willing to spend more money, might improve," he said.

Finally, the state may increase funding in its Payment in Lieu of Taxes program for state property exempt from local property taxes, or boost funding for highway project funds for municipalities, Hurd said.


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