The Board of Finance (BOF) has completed its review of the Town’s budget for the fiscal year ending June 30, 2026. A Public Hearing was held on April 23 to review the proposed budget, which is subject to change based on feedback received at that meeting. The budget will be presented at a Town Meeting for approval on May 7.
The following chart summarizes the proposed fiscal year 2025-26 budget compared to the current year budget:
Chart summarizing the proposed fiscal year 2025-26 budget compared to the current year budget.
The General Government budget increase is due to higher health insurance costs, higher payroll, and higher utilities. Health insurance is the most volatile expense in the budget and costs are projected to increase by approximately 20% next year. The higher payroll is due to normal contractual raises and cost-of-living increases, somewhat offset by restructuring activities that will save the Town approximately $100,000. The higher utilities are primarily higher trash removal and burning fees. A significant offset to these increases is a large decrease in the required Other Post Employment Benefits (OPEB) contribution. This favorable decrease is the result of the Town aggressively funding this liability for many years. Of note, our Town is in the top 95% in funded status in the State, and over half the municipalities in the state have not saved anything for this liability.
The Board of Education budget increase is due to higher health insurance costs, higher salaries (largely contractual), higher special education-related expenses (tuition and transportation), higher textbook expenses due to curriculum changes, and higher utility expenses.
Capital Expenditures includes over forty different items recommended by the Advisory Commission on Capital Expenditures (ACCE) that are necessary to repair, replace, and/or improve the Town’s capital assets. The largest single item on the list is road maintenance of $900,000. Another large item is a conversion of the Science Technology Engineering Art and Math (STEAM) room at the high school to allow for more relevant programming at $395,000. Other larger items include renovation of the modular rooms at Spaulding school ($250,000), an elevator modernization at Town Hall ($110,000), replacement of AC condensers at the library ($150,000), police cruisers ($130,000), ongoing replacement of the flooring at the high school ($150,000), and a bathroom renovation at Spaulding school ($150,000). The Town has previously approved a Townwide Public Safety Radio project and school HVAC projects for bonding and the BOF expects more significant projects to be identified as part of the Facilities Master Plan recently finalized by the Permanent Building Commission. In anticipation of these expenses, the BOF has budgeted a transfer of another $2,000,000 to the Capital & Non-Recurring Expense Fund (CNRE) to help offset the future taxes needed to fund these capital projects. After this transfer, the CNRE balance will be approximately $10,000,000.
On the revenue side of the ledger, non-property tax revenues are lower primarily due to decreased interest income on Town deposits because of both lower interest rates and lower cash balances due to pre-funding the projects approved for bonding noted above.
Grand list growth was negatively impacted by changes in State law. Specifically, new property tax exemptions, changes in valuation of automobiles, and changes in treatment of Income and Expense penalties, along with the Town-approved Farm Exemption, reduced our tax base. But for these changes, the mill rate increase would have been closer to 2.60% instead of 3.44%.
The BOF has also considered long-term trends, our financial position, and future projections when determining the appropriate mill rate. The BOF reviews the Town’s balance sheet, including the Undesignated fund, the CNRE fund, and the Medical Insurance fund on the asset side and the Pension Fund and OPEB Fund on the liability side. The BOF believes our balance sheet is in excellent condition.
If you would like to learn more about the proposed budget, feel free to review budget materials on the Town’s website and plan to attend the Public Hearing and the Town Meeting on the budget. We will be happy to answer any questions that you may have.