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Town Manager: Budget Process Will Be Difficult

Current year's budget is running at a deficit, and the first look at next year's budget points to a tax increase.

The total value of West Hartford's grand list for 2012 won't be finalized until next week, but Town leaders are already working on what could be a very difficult budget for the upcoming fiscal year.

News is not favorable regarding the current year's budget either; the six-month financials show the potential for a $1.5 million deficit as a worst-case scenario. All departments have been asked to cut expenses as much as possible, and Ron Van Winkle has said that all requisitions have to be approved by his office.

"There is no question that we have a struggle ahead. A $1.5 million deficit at this time of year is not a good thing," Van Winkle said. Taxes cannot be raised retroactively once the budget is set, so the Town needs to find a way to balance it.

One piece of good news released by the Town Manager at Tuesday night's Town Council meeting is that preliminary numbers indicate a large increase in the value of residents' motor vehicles.

"Preliminary numbers show that the value of motor vehicles increased by $27 million. It's a very strong year for our grand list in that piece," Van Winkle said.

Although the tax impact for individuals cannot be determined until both the budget and grand list are finalized, Council members have already been advised that the cost to maintain West Hartford's current level of services may be another $15 million.

"We always [start with a] pro forma – worst case scenario – budget,” Van Winkle said. That's just the starting point for the discussion, he said.

"We will discuss ways to reduce any tax change to the lowest amount that can occur. The next three months are a very busy time," Van Winkle told the Council.

One factor impacting the budget is cuts in state aid. Revenues are also impacted by falling interest rates, and Van Winkle said this has cost the Town several million dollars in lost interest income over the past few years based. The economy has not recovered as fast as anticipated, also resulting in lower-than-predicted revenues. The Town's contractual obligations based on collective bargaining agreements, as well as required contributions to the West Hartford Pension Plan (for employees who have already retired) will increase expenditures in the upcoming fiscal year.

A major component of an individual's tax burden is the value of their real estate. Van Winkle confirmed that real estate values have generally fallen since the last reassessment in 2006, but that doesn't mean an individual's taxes will fall.

"If your property fell more than your neighbor's you may end up paying less taxes. Even if your property value went down your taxes may go up based on new mill rate."

The mill rate will be set through the budget approval process, and the distribution of the tax burden on individuals vs. businesses will depend on the grand list.

Van Winkle said that more information would be forthcoming in the coming weeks. "Once we have this grand list finalized we’ll be able to go back and look at how it affects the tax impact on individual properties,” he said.

The Board of Education will begin a discussion of its budget priorities in early February and the education budget, which is a significant line item on the Town's budget, will be presented to the Board by the administration in early March. A public hearing on the school budget will take place in late March, and that budget will be adopted in early April.

The overall budget will initially be presented to the Town Council on March 13, and will be adopted on April 23.

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