It’s Budget Time
The Town Manager has issued his proposed budget for the 2019-20 fiscal year. Click here to view his Budget Message. The budget is important to all property owners since it determines the taxes we will pay in the upcoming year.
Property values were re-assessed this year, and went up 8.89% overall. The revenue-neutral tax would be 20 cents per $100 of assessed value. The Town Manager proposed a tax rate of 22 cents, which is the same as last year’s rate, but 10% more than the revenue-neutral rate – or basically a 10% increase in taxes and spending.
Long-time owners sometimes worry about getting priced-out of their properties due to increased taxes. It is important to note that this situation is not due to increased property values, but the result of increased Town spending. In years when property values are re-assessed, the Town is required to determine the revenue-neutral tax rate, which is the rate that results in the same tax revenue. For example, if property values double, the revenue-neutral tax rate drops by one-half, so the amount of tax paid doesn’t change. If the Town always adopts revenue-neutral rates, your taxes will not increase over time. The Town’s revenue will still increase, however, as the result of new (and improved) properties.
Another important aspect of the budget is whether or not the Town is saving money for a rainy day, or spending the savings it has. The Town’s “savings” are its fund balances. The fund balance goes up when revenues are greater than expenses, and goes down when funds are appropriated (i.e., transferred) to pay for expenses. The proposed budget calls for $1,538,258 in fund balance appropriations from the Water and Sewer Fund to pay for sewer lift station repairs, and $316,559 in fund balance appropriations from the BPART fund. BPART funds are derived from the Occupancy Tax generated from rental properties and are primarily intended to support beach protection and other vacation resort related expenses.
The third important aspect of the budget is the amount of long-term debt. The Town currently has significant debt related to the Town Hall and Emergency Operations Center buildings, the sewer system, and the Central Reach project. The amount of debt determines the annual expenses needed to pay off the loans, and also impacts the ability to take out and pay for any new loans. The proposed budget does not include any new debt.
At their meeting last Tuesday, May 21st, the Commissioners unanimously passed a motion to reduce taxes to the revenue neutral rate. The Town Manager will revise the budget accordingly and will present it in final ordinance form for approval at the June 18th meeting; however, the Budget Message will not be revised, so the only opportunity to review and comment on the final budget will be at the June 18th meeting, just prior to it being voted on for approval and adoption.
If you would like to provide the Commissioners with your input regarding next year’s budget, please contact them before it is too late to make changes.