Politics & Government

Middletown's Budget Proposal Calls for 3.14 Percent Tax Increase

Here's an overview of the first draft budget presented Monday night before the Town Council, along with a look at the public budget review process to begin next week.

Town Administrator Shawn Brown presented his first draft budget to the Town Council Monday night, calling for a 3 percent tax increase to help close the town’s estimated $3.1 million structural deficit this year.

If the budget stands as submitted, the average homeowner and taxpayer would see the tax rate increase 3.14 percent, from $13.36 to $13.78 per $1,000, according to Lynne Dible, town finance director. The median single-family home in Middletown would see an annual increase on their tax bill of about $135, she said.

With the four-inch-thick proposal before him Monday night, Brown outlined the harsh realities the town faces in the coming fiscal year, a structural deficit brought on by the reverberating effects of the last decade’s recession, reduced incoming tax revenues, ongoing storm water improvement projects mandated by state and federal regulators, and state and federal funding cuts to the school department.

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At Monday night’s Town Council meeting, Brown said he’s seeking no additional funding for municipal government departments this year outside the School Department, but the increase on the town side is for debt management services. In the recent 2010 election, voters approved a $3 million bond for sidewalk and roadway improvements, while the town in recent months approved an emergency bond of $2 million for stormwater drainage improvements on the Esplanade as part of a settlement with federal regulators.

“Going further than that, I’ve asked for no additional monies for salaries, no additional monies for benefits, and no additional money for operations,” Brown told council members. “So absent that long-term debt service on the town side, the administration is not requesting additional funding from the council.”

Find out what's happening in Middletownwith free, real-time updates from Patch.

Middletown's Proposed FY 2012 Budget:

FY 2011 FY 2012 Change Total Operating Budget $63,434,016 $63,686,703 +.4% Municipal $26,109,901 $26,601,754 +1.88% School Dept. $37,324,115 $37,084,949 - .6 %

Even though the proposed budget calls for a .6 percent cut to the School Department budget, the remaining portion of the proposed 3.14 tax increase needed to raise revenues is attributed to making up a huge shortfall within the Middletown Public Schools Department budget.  

In balancing the school district’s budget this year, school officials had to reconcile a gap of approximately $1.5 million that resulted from the end of federal impact aide to schools and a change in the state’s funding formula, the exhaustion of the school district’s fund balance, which had been used last year to make ends meet, and an increase of approximately $700,000 in expenditures within the school district for benefits and contractual obligations.

Schools officials have described their budget as a stripped down spending plan designed only to meet the state’s mandated Basic Education Plan (BEP) requirements for basic instruction, also known as Level 1 funding.

On the town side, all municipal departments currently are working with the Town Administration and Finance Department to balance the budget, including looking at contractual obligations, according to Dible.

“We are negotiating with all of our unions. Everyone is working together to address this, including reopening some contracts,” Dible said on Tuesday.

Brown said all financial indicators show that the recovery effects from the recent recession won’t be realized in town until about 2013-2014, restoring town revenues to levels seen in 2008.

“The great recession does not appear to be followed by a great recovery, at least not in the foreseeable future,” Brown said. “So what we’re left with is two things: One is having to reconcile the economic realities that were somewhat masked by the federal stimulus package, and the second is that there’s a responsibility to contain the expenditures and growth over the next two years.”

The budget put forward by Brown also includes the continuation of ongoing capital improvement projects the town has undertaken. Some include projects related to economic development, while others are deferred maintenance issues that need to be dealt with before they worsen and become more costly later, officials have said.

Brown said there are no proposed changes to the sewer fund, and no proposed increases to the town’s Parks and Recreation Fund, beach stickers, or fees for the town’s Pay-As-You-Throw trash and recycling program.

How to Stay Informed

  • The first budget workshop to review the finer details of the proposal will be Monday, April 11, at 6 p.m. to review general fund revenues, budgets related to the town administration departments, the Police Department, Fire Department, Department of Public Works, Town Solicitor, and courts.
  • More weekly budget workshops will follow throughout the spring before its final passage in June for fiscal year 2011-2012.
  • The complete budget workshop schedule can be viewed or printed from the image gallery above.
  • Financial reports will be made available online through the town website within the next 24 to 48 hours, town officials said.
  • A complete copy of the proposed budget is available to view at the Town Clerk's office during regular business hours.


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