Deerfield Finance Committee chief issues warning
DEERFIELD — Finance Committee Chairman Albert “Skip” Olmstead Jr. is warning town residnets that the community will need a tax override in two to three years if it continues to spend its surplus “free cash.” The town plans to use $559,301 of its $1,192,921 free cash fund, decreasing the surplus to $633,620.
When the town discusses an improved ambulance service in the fall, Olmstead expects the only way the town can pay for it is through free cash, which is not guaranteed to come back.
“Once we get into the fall and talk about it, I think it’ll be obvious we have to do something in the form of an override,” Olmstead said.
Olmstead issued that warning to the town’s Board of Selectmen last week.
Town Administrator Bernie Kubiak agreed with Olmstead, saying “at some point, the town will have to look at an override.” He said whether it actually does happen depends on whether the economy improves — which would result in more spending and a greater sales tax return. To avoid an override, Kubiak said state aid would have to return to its pre-2008 levels. Over the past four years, it has decreased by 38 percent.
“We’ve been nicked and cut in a series of small reductions,” Kubiak said. “The question isn’t if we will have one, but how long can we delay it.” If the town approves a Proposition 2½ override, it would allow for it to raise property taxes by more than 2.5 percent.
Olmstead said his concern is that the property tax already prevents younger families from moving to town.
“If you grew up in Deerfield, there is a strong chance you can’t live here,” Olmstead said. “The property values are high. It’s a tax rate on top of a very high property value.” The property tax value is $11.49 per $1,000. For a $200,000 home, a homeowner would owe $2,298 in taxes between the property, fire district and water district taxes.
“Deerfield has a good school system. People want to move here but people can’t afford to live here,” Olmstead said.
The town has several revenue streams, including taxes, that support the budget and add to the surplus.
In total, revenue for next year is estimated at $13,659,522, up $765,628 or 5.9 percent from the current year.
Total property taxes amount to $8,994,710 for next year. The motor vehicle excise tax adds $550,000, up from $535,000 the current year. For Fiscal Year 2014, which starts July 1, the town expects $1,625,865 in state aid.
On top of the $107,437 Frontier Regional School reconstruction debt next year, it will have the debt from the new $5.9 million highway garage to pay off instead. To pay off the debt, the town would have to raise the tax rate by 60 cents.