Employee insurance costs: Budget 2.1 million; Actual 740K; Variance - 1.4 million under budget!

Overtaxed ... in Error!


Submitted 16 days ago
Created by
F. X. Flinn

Some additional detail on Hartford's huge FY2018 surplus

There's been a spirited discussion about last week's revelation that Hartford suddenly has 2.4 million in its rainy day fund.

Hartford, Vermont voters agreed at town meeting in March 2017 to collect 12.8 million in property taxes and anticipated getting 2.5 million in fees and grants to cover FY2018 expenses of 15.5 million. It turned out the budget presented to the citizens by the Selectboard overestimated employee insurance costs by 1.4 million. Hartford also sold a radio tower for 900K. The FY2018 Audit reveals there were a number of departments over budget, so the 2.3 million surplus became a 1.9 million surplus.

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Now ask yourself, why, if employee insurance cost us 700K instead of the 2100K (2.1 million) budgeted, shouldn't that money be returned to last year's property tax payers? Hartford taxpayers would be expected to make up the difference for an error in the other direction, not in their favor, right? Obviously the people who made this mistake are long gone from town staff, and thank goodness they are. But treating this mistake like it is some glorious opportunity to spend money painlessly is, I think, a betrayal of the trust the citizens expressed when they supported the 2018 budget in March of 2017.

We did collect more property taxes than anticipated, but even there the story is not really complete since there is another 500K of uncollected taxes not showing on the books yet. That would have pushed the surplus to $2.8 million. That's enough to, for example, pay for the pool in one fell swoop, or install a track at the high school, or catch up on all the paving, or ... lots of things. But in town meeting form of government, people expect to have a say in big ticket items like that in the form of bond votes or a contentious budget (such as 2014's attempt to add 6 new public safety positions in one fell swoop).

And traditionally, in Hartford, surpluses have been returned in the form of applying the surplus to the following year's budget. Go back and look at the town meeting resolutions for the past 20 years and in most of them you will see the budget resolution includes not only the amount to be spent, and the amount expected to be received in grants and fees, but also the amount of prior year surplus to be applied.

If you want to look at this money as an opportunity to "catch up" on infrastructure spending that ought to have happened in the past, well, imagine taxpayers in 2016 being told "We're adding 1.4 million to the budget to catch up on stuff we should have been doing for the past 10 years." Think it would have passed? If we do go ahead and just spend this money, it will be an open invitation for future Selectboards to grossly overestimate budget items with the intent of diverting the surplus to other items.

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