Monroe First Selectman's Proposed Budget Has 1.84% Tax Increase

MONROE, CT — First Selectman Ken Kellogg is proposing Monroe spend $96.15 million to operate the town in 2022-23, an amount that represents a 3.33 percent increase over the current year's allocation, and a 1.84 percent increase in taxes.

Below is Kellogg's proposed budget message (text in bold is from Kellogg):

Good Afternoon,

During last night's Town Council meeting, I delivered an overview of my proposed budget for fiscal year 2022-2023 to the Town Council. In preparing this budget, I remained committed to controlling taxes while improving roads and infrastructure, delivering cost-effective services to our community, providing excellence in education, and maintaining the strong financial health of the Town that was affirmed by Standard & Poor’s recent upgrade of Monroe’s bond rating to AAA.

Last year, my budget message was a reminder of the extraordinary measures that were taken in response to the pandemic, and how reasonable and prudent measures were used to manage its impact while avoiding significant tax increases. While the pandemic has subsided, it continues to create budgetary pressures. Increased costs of supplies and services due to vendor supply chain challenges, labor shortages, and significant surges in fuel costs are directly impacting the Town. This, along with contractual wage increases and the anticipated escalation in healthcare insurance premiums, are our major cost drivers. These factors are also impacting our school system, which is further challenged with increased enrollment and burdened with pandemic-related student needs. Overall, municipal expenditures are budgeted to increase by 3.2 percent, while the Board of Education, which represents 67 percent of the Town’s budget, has requested an increase of 4.75 percent.

This year, I continue to minimize the tax burden through conservative spending, use of alternate funding sources, and fostering growth in our grand list – deliberate practices which were proven successful in the current fiscal year. For example, in FY22 we significantly reduced our planned utilization of our unassigned fund balance, or “rainy day fund,” in a planned transition to mitigate the initial impacts of the pandemic. While we are prohibited from utilizing funds from the American Rescue Plan Act (“ARPA”) for a tax cut, it is now clear that we may utilize these funds for certain future, ongoing operations. Use of these grants in both the current and following fiscal years allows us to continue to ease the tax burden, despite rising costs with little, if any, impact to our fund balance. Additionally, the Board of Education’s use of similar pandemic relief funds lowered the Superintendent of School’s budget submission that proposed an increase of 5.39 percent.

Monroe’s significant grand list growth will further reduce the impact to our tax rate. While both residential and commercial property growth were robust, we have seen a dramatic increase in the valuation of motor vehicles, consistent across the state and driven by a high demand for used vehicles. While it is difficult to predict when that market will stabilize, our grand list must incorporate current market value. Utilization of ARPA grant funds, in concert with motor vehicle grand list growth that is likely temporary, also allows for greater flexibility in funding projects for this upcoming fiscal year. My budget proposes over a million dollars in capital project spending, without the need for bonding.

Without our growth in the grand list, a conservative and disciplined approach to spending, and use of alternative funding, taxes would have grown by over 10 percent, a rate I believe would be unacceptable to most. My budget incorporates a projected tax rate increase of 1.84 percent. This is an average of less than 1 percent per year over the past five years. Of the total increase in operating expenditures, 75 percent is attributed to education and 25 percent to municipal costs.

I greatly appreciate the dedication of our staff, educators, and volunteers – including those serving on boards and commissions. As this process continues forward to our annual referendum on May 3, 2022, my team and I will devote many more hours refining the budget as the Town Council and Board of Finance conduct their review. As always, I will continue to communicate any new information as it becomes available so that further adjustments can be considered.

The full budget document, as well as my presentation and the preliminary budget meeting schedule, are available at www.monroect.org/budget

I look forward to presenting a final budget that will be supported by the voters of Monroe.

Ken Kellogg, First Selectman