Finance Committee Adopts 3.5 Percent Budget Guideline

December 2, 2022

The Bedford Finance Committee on Thursday adopted a 3.5 percent guideline for the Fiscal 2024 school and municipal budget increases.

The across-the-board guideline reflects a full percentage-point increase for town departments compared to the current year. 

The 5-2 vote (two members were absent) followed members’ individual rationales and an attempt at a compromise.

Member Karen Dunn was the first to support the 3.5 percent, saying that “it’s reasonable to spend to support town services and maintain assets.” She added, “I think everybody here is well intended and really wants to do what’s right for the town. We don’t agree on how to get there.”

Her committee colleague Ben Thomas said 3.5 percent is “a good starting point.” He said his informal conversations with the town manager indicate that the committee soon will be considering “numbers that are a little uncomfortable.” 

Thomas added that he is “a little nervous” about the increasing costs of fixed expenses. Finance Director David Castellarin noted that the cost of utilities may rise as much as 9 percent.

“Are there situations where level funding means service cuts? I don’t want to get in that situation,” he added, Thomas acknowledged that major commercial developments are expected to augment the tax base over the coming months, but there are many other variables.

Member Abbie Seibert, noting that “we will know more as time goes on,” also endorsed a 3.5 percent guideline. She said town departments have been deferring some proposed expenditures.

“To me, 3.5 percent is not going to make things go through the roof,” said committee Chair Paul Mortenson. “We do have inflation, so I think it’s unrealistic to go lower than 3.5, and we can always adjust.”

Elizabeth McClung and Stephen Steele advocated for a lower guideline. “There’s a lot of people in town who are really struggling right now,” McClung said, citing reports of greater demand at the town food bank. “I’m very reluctant to increase taxes any more than what we need.” She called for a 2.5 percent increase for town departments and 3.15 percent for schools.

“Some people are having trouble getting food on their table and the last thing we need to do is increase the tax burden more than necessary,” McClung said

Steele supported a 2.5 percent increase guideline across the board. “I don’t want to burden the citizens any more than we have to,” he said. 

Steele said rising costs and other economic challenges make budget preparation “razor thin.”

Steele also noted that a 3.5 guideline can’t be reduced, while the committee can be more flexible at 2.5 percent.”

McClung tried a compromise guideline of 3 percent municipal and 3.2 percent education. Steele seconded the motion, but only Seibert joined them in support. Then Thomas moved 3.5 percent and it was approved 5-2.

Mortenson said the 3.5 percent guideline has been effective at managing the education budget in recent years because it is realistic. “We have saved a lot of money because the schools used to come in at much more than that. We gave them a predictable understanding.”

Steele commented that the committee approved past budget adjustments in response to higher enrollment, but now the student population is on the decline. Thomas replied that it’s not a significant difference.

Seibert, a former School Committee member on her first FinCom budget cycle, said it would be helpful to have a sense of a guideline’s property tax impact. Castellarin replied that there are so many variables that any estimate wouldn’t be accurate.

Seibert asked if the town has a policy regarding its unused tax levy. Under the state law known as Proposition 2 ½, a municipality can increase taxes on real and personal property by no more than 2.5 percent annually in addition to allowing for new growth. Some years, taxation may not reach that ceiling, and it continues to expand. At some point, Town Meeting could approve expenditures that reach the limit, exceeding the 2.5 percent. 

Steele said the possibility of relying on unused levy to meet budget demands is a “major concern.” Thomas said, “We’re kind of in uncharted territory. I always thought of it as one of various funds to make sure we have emergency reserves.”

Thomas told Seibert that this has only been an issue in Bedford recently, triggered by a surge in revenue from assessment of personal property and the release of an overlay reserve by the assessors. He added that it is premature to consider an “underride,” which would reduce the levy limit if approved by voters on a ballot.

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