The preparation of the municipal budget for Town Meeting is always a complicated and challenging process, and this year was no exception as Hinesburg continues to feel the impact of the national economic crisis. The slow down in development and new housing construction, the dramatic reduction in interest income and the loss of revenue due to the closing and decommissioning of the Saputo Cheese facility have all had dramatic impacts on the revenue projections for the coming year.

The downturn in the housing market and the slow down in development impact the Town’s Grand List. The Grand List is the total taxable property value of the Town measured April 1st of each year. For several years prior to 2008, the value of taxable property in Hinesburg increased between five and seven million dollars annually. This increase in taxable property mitigated the impact of budgetary increases on the tax rate. The downturn in the economy slowed development thus minimizing the growth in the Grand List. In addition, the closing and decommissioning of Saputo Cheese further reduced the Grand List. As a result, the Selectboard prepared a budget that anticipates zero growth in the Grand List for the second year in a row.

To make matters worse, due to falling non-tax revenue during FY 08 – 09, there are no surplus funds available to put back towards the budget. For many years the Town has been fortunate to realize unanticipated revenues as well as expenditures that came in below budget. The result was a surplus. For the past several years the Selectboard has been able to apply the surplus fund balance (some years as much as $200,000) towards the budget to offset the tax rate. This will not be the case for the coming budget year, as there are no surplus funds available from the past year’s budget.

Department Heads and the Selectboard were well aware of the impacts of the lack of surplus funds and lack of growth in the Grand List during the budgeting process, and again chose to delay numerous projects and purchases. Many of the budgets were either level funded or decreased from the current year’s funding level. This was a challenging endeavor, considering that the cost to provide services to our community in many cases has not decreased.

Delaying of projects and purchases resulted in a decrease in budgeted expenditures of $35,853 from the current year’s budget, from $2,700,391 to $2,664,538, or a decrease of 1.3%. Non-tax revenue is projected to increase by 9% (around $36,000), from $381,888 to $418,055, due mainly to an increase in the allowed rate for records recording fees and the re-instatement of full funding for the Highway State-Aid Program.

The Selectboard was successful in mitigating the negative impact of the Grand List and lack of surplus funds through decreased expenditures and increased non-tax revenue projections, and the result of these efforts means that an increase in the municipal tax rate for the coming year is not anticipated – it will remain at approximately 45¢.

Of course, the delay in repairs and maintenance cannot continue indefinitely. Eventually roads will need to be repaired, equipment will need to be replaced. These delays may end up being more costly to the taxpayers in the long run, but we will hope that when the time arrives, the economic outlook for our country is far better than it is today.

Finally, I would like to extend my appreciation to all the municipal departments, committees, volunteers and especially the Selectboard for the effort that goes into preparing a budget each year. This was again a difficult budget to prepare, but everyone pitched in, suggesting budgetary cuts even though they knew it would make their job of providing services more difficult. There was a clear recognition by all involved that this was not just another year and everyone worked together to present a zero-increase tax rate.

Jeanne Kundell Wilson, Town Administrator – January 2010