TOWN COUNCILOR BILL GERLACH: REASONS TO SUPPORT BUDGET 1

Tiverton Town Councilor Bill Gerlach:

Just came back from early voting for BUDGET #1 as part of the Financial Town Referendum. While the FTR process affords those who wish to put forth a petitioners budget a way to do so, I hope all give pause regarding the other budget on the ballot and not be swayed by the allure of a 0% tax increase. Here's why:

BUDGET #1 -- the budget that I and my colleagues on the Town Council collaborated with the School Committee and Budget Committee on for countless hours -- is a very fiscally-responsible budget that increase taxes by 1.29%, a historic low for the town. That 1.29% equates to around $75 in additional annual taxes on a $300,000 property. Folks, only the priorities of the priorities made it through on to this budget.

The other budget that was submitted would keep the same level of funding but pay for it by pulling funds out of the town's General Fund (instead of collecting it in the form of the very modest tax increase). While this sounds great on the surface, it will create a VERY negative downstream impact for the following reasons:

1) It starts the next budget cycle (FY '15 - '16) $600,000 in the red -- money that will have to be made up in some way (read: a higher tax rate). Smart, sensible budgeting avoids up-and-down spikes in the tax rate in favor of a smoother trend line. BUDGET #1 supports that smoother trend line and avoids the spikes.

2) It positions the town unfavorably when it comes to its bond rating. Next year, the town will go out to bond for the new library. A lower bond rating will mean a higher interest rate on the bond. This will create higher annual payments for the life of the bond, which tax payers will have to be on the hook for.

Those putting forth the alternative budget will argue that the General Fund is too large and goes above the Town Charter directive of 3% of the operational budget of the town. The former Town Council put forth a prudent plan to increase the General Fund in a modest way in order to ensure we had enough in case of a "rainy day" and be well-positioned in the eyes of creditors and lenders.

They will argue that we view the General Fund as a slush fund of sorts, available to pay for operational costs on a whim. NOT SO. Any expenditure out of the General Fund REQUIRES a vote of the citizens in the form of a referendum. The Town Council CANNOT just spend it willy-nilly.

I'm happy to talk to anyone more if you have any questions. I hope you do support BUDGET #1 when you vote in the upcoming FTR. Remember, early voting finishes tomorrow, Saturday, May 17th, from 8:00AM - 4:00PM at Town Hall. Then regular voting happens this coming Tuesday, May 20th. See the town website for more details.

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