1981-05-26-AC-ATM-rpt - Laserfiche WebLink

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APPROPRIATION COMMITTEE SUPPLEMENTAL REPORT The Appropriation Committee has just completed a frustrating six months . Not only did we have the problem of a very tight budget facing Lexington because of Proposition 2 1/2, but we also tried to visualize where the money could be obtained to maintain an even righter budget under the new law. The budget considerations them- ' selves involved much discussion and re-evaluation as to the order of priority for the many services which the Town renders to its citizens. The sources of revenue were also a problem. The Appro- priation Committee is strongly opposed to initiating new or addi-' tional fees for services such as sewer, water, etc. This is equivalent to increasing the real estate tax and not reducing it according to the purpose of 2 1/2. It again puts the burden on those who can least afford the increased financial obligation. We also felt that Lexington should dip sparingly into its "free cash" because the next few years are critical under 2 1/2 and the money will be needed and may not be obtainable. In the early fall, the revenue situation under 2 1/2 looked reasonably promising. -- At that time, the "word" to us indicated that the property evaluation, now in progress, would adhere to the formula which sets the -upper limit for the total real estate tax levy for 1982 - 1983. This project, through the Assessor' s Office, is about completed. We felt, upon reviewing the emerging figures from this project that the increase in the valuation would • be sufficient to produce enough revenue to help finance a reasonable and modest budget for next year and yet meet the legal limitation on the tax rate. In fact we felt (after examining the new proposed budget) that the tax bill to individual taxpayers might well be reduced if the re-evaluation value came in at the upper limit of the probable range. It soon developed, however, that the property re-evaluation would play no part in the formula and that the real estate tax as a source of revenue would be limited to 1.025 times the total billed for the current year. This, of course, is a fixed number and we immediately asked for and received the estimate for the other revenues which the Town would receive, such as fees, state aid, etc. When this estimated additional income was added to the legal allowable real estate tax, we were $354, 366 short of meeting the operating budgets for the Town and School Department, assuming nothing in addition to this budget was voted by Town Meeting itself., The Appropriation Committee was extremely disturbed about { $1, 200 , 000 which was to be taken from the "free cash" in order to arrive_ at the above deficit of approximately $350, 000 . At last year' s Town Meeting time, the suggested amount of "free cash" to reduce the tax rate was then only $1, 000 , 000 . At the insistance of the Treasurer and the Appropriation Committee a figure of $750, 000 was finally chosen as a compromise and presented to Town Meeting, where it was voted. Most of the members of the • Appropriation Committee felt $500, 000 would have been a better figure . The $750, 000 amount was a fortunate choice over the $1, 000, 000 or we would have been in much worse financial shape as many other Towns have found out in the last few months, to their dispair. The $500, 000 would have been still better for the present situation, although the increased tax rate for last year would hardly have been popular.