Shanley Proposes 1.9 Percent Tax Hike in New Budget

General Manager Scott Shanley unveiled his budget proposal for the 2012-13 fiscal year Tuesday, which calls for a 1.9 percent rise in taxes, increases overall spending by 2.2 percent, and freezes one vacant position within the town. 

In assembling his $203,737,597 budget proposal, Shanley said he tried to keep in mind four areas identified by the Board of Directors as priorities in town: 

• Limiting the tax increase
• Focusing on education and facility renovations
• Encouraging economic development 
• And maintaining neighborhood and community pride and safety

The largest portion of Shanley's budget, funding for the Board of Education, increased by 2 percent or $2.05 million to $102,571,735.

Shanley noted that he decreased the Board of Education's requested budget by about $220,000, which adjusted for a decrease in the amount the school system will need to contribute to its pension fund. The education budget also includes the town receives from the state, but that increase in state funding will be offset by a new mandate that towns must pay for its students who attend out of town charter or magnet schools. Interim Superintendent Richard Kisiel estimated that would shave about $220,000 from the overall school budget, according to Shanley. 

"Although I'm thankful that the governor approved more money for education, it still can't even begin to keep up with the cost of education," Shanley said, noting that Board of Education funding made up both the bulk of the town's overall budget and the projected increase for the 2012-13 fiscal year. 

Town government spending will increase spending by 2.5 percent or $1.58 million under Shanley's projected budget, to a total of $64,444,292. Shanley noted that he was able to freeze and not fill a vacant position in the Engineering Department, but that that brings the town to a total of 22.5 currently vacant and unfilled positions. 

"We continue to save money long-term by doing that, although we are now at 22.5 positions that we've done that to and it's much more slow now," Shanley said. 

Town funding will also increase by $500,000 to provide within the school system that have been identified as an immediate need, to be coupled with an additional $500,000 budgeted by the Board of Education to bring the total to $1 million available for school capital and renovation projects during the coming fiscal year. The town's debt service will also increase by $336,905, and Shanley's budget also uses $250,000 from the town's reserves. 

Under Shanley's proposed budget, taxes would increase by 1.9 percent, and the Mill Rate would increase to 31.56, but Shanley noted that due to the recently completed that dropped most real estate prices in town by about 11 percent, 67 percent of residents would actually see no increase or a decrease on their property tax bills. A mill equals $1 of tax for each $1,000 of assessed property value. An additional 10 percent of residents will have a tax bill increase of two percent or less, Shanley said. 

Taxes on motor vehicles and personal property will rise by 12 percent, forcing the taxes paid by businesses on commercial and real estate property and owners of automobiles to shoulder a greater budgetary load. 

"The (tax) shift is away from some of the residential and more towards some of the commercial properties," Shanley said of his budget. 

Mayor Leo V. Diana said he was pleased with Shanley's budget and that he found it a "realistic proposal" for the citizens of Manchester. 

"We are all aware that in this economy we need to keep taxes low and maintain services," said Diana, a Democrat. 

But Republican Mark Tweedie said he was troubled by the fact that Shanley's budget dipped into the town's reserves, which were already well below normal levels due to the about $6 million Manchester spent in reserves . Tweedie said that he was concerned that lowering the town's reserves further could damage its bond rating, meaning the town would have to pay a higher interest rate on money it borrows. 

"If we can't be putting money into reserves, we shouldn't be taking money out of it," he said. 

Shanley said he believed the town has a strong history of managing its reserves, which credit rating agencies would take into account, and that the town is still expecting to be reimbursed for about 75 percent of its storm cleanup costs sometime in 2013. 

The Board of Directors will review Shanley’s budget department by department in a series of workshops for the better part of the next month, before voting to approve a budget for the coming fiscal year in mid-April. The first budget workshop is scheduled for Wednesday evening.