A 'perfect storm' for the town budget

On March 10th the Town Manager delivered his proposed budget to the Town Council. For some context, this proposal is just that—it is a proposal that the full Town Council and the public has an opportunity to review and discuss before a final budget is voted upon in late April. It’s not an overestimation to say that this is one of the most challenging budgets any Town Council has had to face. In short, costs are up and at the same time, typical funding sources have been expended or aren’t available this year and/or are significantly reduced. The above image tells a big part of the story. We’re facing a $15 million dollar gap between current revenues and anticipated expenses. As is, the proposed budget would mean a 3.7 mill rate increase, which would translate to a property tax increase of about $1100 for Cheshire taxpayers with an ‘average’ home value and ‘average’ vehicle values (see below.)

Importantly, the Town Council will not be approving the budget ‘as is.’ It is our goal to protect all taxpayers as much as possible while also delivering the services Cheshire needs and demands. It’s a balancing act. We encourage members of the community to review the current budget along with us, as we explore line by line what we absolutely cannot do without and which town services we might need to cut back or eliminate.

Last year we were able to reduce the mill rate from over 35 down to 27.46 mills. It was the largest mill rate decrease ever in Cheshire. It’s true that despite the dramatic decrease in the mill rate, most Cheshire residents saw an average tax increase of $400. This is because last year properties were reevaluated (every five years, the town undergoes reevaluation), and due to the recent real estate boom, most homeowners in Cheshire have gained tens of thousands of increased property value. In other words, the big increase in residential property values far exceeded last year’s tax increase, and Cheshire now has one of the lowest mill rates in the state (not to mention the lowest in our area.)

Although we now have an incredibly low mill rate, we are a community that also has significant needs that have been deferred for decades. Our newest school was built in 1971 and most schools are not air conditioned, resulting in occasional school closures due to increasing temperatures in early fall and late spring. To address our community’s aging infrastructure needs, the community overwhelmingly voted in support of a referendum in 2022 to finance new schools. Two new elementary schools will open in 2026, but we will really begin paying for their construction this year. In preparation for this coming expense, we carefully scrutinized last year’s budget and were successful in cutting the increase in spending by almost a full percentage point (reducing the increase from 5.93% in FY2024 to 5.23% for this FY2025 year)

By now you may be saying ‘ok but what about this year?’ Good question.

We’ve had budget workshops so far with the Fire Department, Police Department, Public Works and the Water Pollution Control Department. So far, over five plus hours of budget workshops, we’ve identified perhaps $150k of cost reductions and potential revenue increases. Needless to say, so far, we’re not finding the millions needed to close the gap this year.

The Town Manager’s proposed budget includes a modest 3.5% spending increase. The vast majority of the increase is simply general wage increases (about 3%) for town employees in public safety, public works, town hall, the library, park and rec and so on. In addition to wages, fire fighters need new protective gear, police officers need working radios, public works crews need tools, and equipment and trucks. Water Pollution Control needs expensive chemicals (a lot of chemicals) for waste-water processing and the heating system in their building has been broken since October (they are currently using space heaters to warm their offices), and so on and so on.

The town runs very efficiently. Everyone is aware of their responsibility to be good stewards of public resources, and no one goes into public sector jobs for the paychecks. The Town Manager’s budget doesn’t propose new staff positions or significant spending increases (except for a few contracted services like trash collection, for example), In other words, the proposed town budget is intended to simply maintain current service levels. Which begs the question, how can the gap between expenses and revenues be closed this year?

The town and school budgets are largely wages and benefits. So, it doesn’t take much analysis to see where the money is at and to figure out that reducing costs means reducing staff. There’s no shortage of people in our community that’ll tell you the budget is full of ‘fluff’ and the Council just ‘spends and spends.’ Well, these folks are either running for something or they haven’t opened a budget book in a while. None of us on the Council want to raise our own taxes. Never mind everyone else’s taxes.

The big commercial and residential development up near I-691 will be worth $6 million in tax revenue to the town, conservatively. Hopefully more! But we’re two years away from these revenues being fully realized. In the meantime, we’re going to have to tighten our belts while trying not to harm operational efficiency and effectiveness too much. Some sacrifices will need to be made. But how much and to what extent is still TBD.

For years the name of the game in Cheshire was to starve the schools, insufficiently fund our police force and defer necessary maintenance on town buildings year after year. This has resulted in us having to build two new elementary schools (at the most expensive time), playing catch-up with our Waste Water Treatment Plant and suffering through high turnover at our police department. We can’t slide backward. Cheshire is increasingly a place people want to live, work and play. This is because we’re a safe community with excellent services, high-performing schools and a low mill rate. We all benefit from the success of our town. We have to be careful not to undermine what we have with short-term thinking and election year promises. We hope you will be part of this process. We have some difficult decisions to make, and we welcome your voices.