The chart above is an analysis of Town finances and the direction we were headed had we continued to not raise taxes and expend money from the savings account when I took over as Supervisor in 2006.Historically, the past administration rarely raised taxes, if at all, over 1% because they were operating with a surplus created by FEMA disaster grants totaling $212,000 and excess cash in town accounts (CDs), that generated an average of $ 21,324 per year in interest income (1999-2005). The Town had on average, of $635,000 of unrestricted funds in the bank, every year at year end, from 1999 to 2004. That balance dropped to $525,000 at the end of 2005, due to purchase of the new town garage and to $468,515 by the end of 2006, the past administration's last budget.
Chart Explanation
Calculations used for five year projection chart were:
- 1% yearly increase in property taxes
- 1 % increase in revenues
- 3% (cost of living) increase in expenditures
- Starting in 2007 a $25,000 contribution to the * “Restricted for Inventory Fund”. This restricted fund/savings account, created by Board Resolution in 1996, is to prepare for the inevitable purchase of heavy equipment for the Highway Department. Currently, we are “saving up” for a grader that will be purchased in the next four or five years.
The chart clearly shows an insurmountable *deficit in 2011 had we continued to run operations without increasing taxes. As you can see on the chart by 2011, we have a projected $81,899 shortfall. We can't pay for operations because all the reserves are gone. And by 2011, we would have spent the accumulated funds in the Restricted for Inventory savings account, purchasing the much needed grader, leaving us nothing to seed another fund for equipment.
Any Supervisor or Board in office in 2006 faced the deficit problem. We had no choice but to raise taxes in 2007 to prevent a catastrophic tax increase down the road. A tax increase so astronomical not many citizens in the Town of Lindley could afford in one shot. We chose to make the hard choice and increase taxes 11% to infuse the savings with enough cash to “start” offsetting the growing deficit and maintain a bank balance capable of accumulating significant interest –which we did. We have managed to get an average of $31,000 per year in interest on less money ($10,000 more in interest per year on $110,000 less in cash) and with lower or equal rates than Harold had for most of those years.
Also, I will remind people Harold raised taxes 9% in 2004 and I don’t recall any signs going up around town protesting his increase.
Chart Explanation
Calculations used for five year projection chart were:
- 1% yearly increase in property taxes
- 1 % increase in revenues
- 3% (cost of living) increase in expenditures
- Starting in 2007 a $25,000 contribution to the * “Restricted for Inventory Fund”. This restricted fund/savings account, created by Board Resolution in 1996, is to prepare for the inevitable purchase of heavy equipment for the Highway Department. Currently, we are “saving up” for a grader that will be purchased in the next four or five years.
The chart clearly shows an insurmountable *deficit in 2011 had we continued to run operations without increasing taxes. As you can see on the chart by 2011, we have a projected $81,899 shortfall. We can't pay for operations because all the reserves are gone. And by 2011, we would have spent the accumulated funds in the Restricted for Inventory savings account, purchasing the much needed grader, leaving us nothing to seed another fund for equipment.
Any Supervisor or Board in office in 2006 faced the deficit problem. We had no choice but to raise taxes in 2007 to prevent a catastrophic tax increase down the road. A tax increase so astronomical not many citizens in the Town of Lindley could afford in one shot. We chose to make the hard choice and increase taxes 11% to infuse the savings with enough cash to “start” offsetting the growing deficit and maintain a bank balance capable of accumulating significant interest –which we did. We have managed to get an average of $31,000 per year in interest on less money ($10,000 more in interest per year on $110,000 less in cash) and with lower or equal rates than Harold had for most of those years.
Also, I will remind people Harold raised taxes 9% in 2004 and I don’t recall any signs going up around town protesting his increase.
I’ll present the projected Five Year Budget Plan in the next post to show how we plan to balance the budget, secure reserves and gradually reduce taxes for future financial health.
