Submitted by Bennett Pudlin (Board of Finance), Jason Ulstad (Board of Finance), Al Goldberg (Board of Selectmen), and Scott Murphy (Board of Selectmen)
Like nearly all towns throughout the state, Madison is facing the prospect of substantial cuts in state funding. At this time, the nature and size of those cuts are unknown because the state budget process is still in early stages: The Governor released his proposed budget in early February, but the two legislative committees that produce the legislature’s initial budgets, Appropriations and Finance, will not vote on their budgets until the end of April. After that, the negotiations within the legislature and with the Governor begin in earnest. This session of the legislature officially ends on June 7, but it is entirely possible that the budget will not be in place by then.
By charter, Madison must hold its budget referendum by the end of May so tax bills can be sent out prior to July 1. The budget referendum is currently scheduled for May 16. To meet that deadline, the town budgets must be published in the local paper before the middle of April, long before the state budget, with its almost certain cuts to funding for Madison, is known.
In the face of this uncertainty, the town has kept to the required schedule and has produced the three budgets needed to keep the town operating: town, school, and Capital improvement Plan (CIP) for the town and schools.
Following a public hearing on March 22, the Board of Finance preliminarily approved all three budgets on Thursday, March 23. Here’s where we currently stand:
- Town Budget: The Board of Selectmen approved a town operating budget with an increase of approximately 2.9%, not including the CIP budget, over last year. This is essentially a zero-growth budget, with nearly all the increase due to increased costs for health insurance and contractual wages. The Board of Finance approved the town budget with a minor technical adjustment.
- CIP Budget: The CIP committee, comprised of two representatives from each of the BOS, BOE, and BOF, had proposed a 3.54% increase over last year’s budget. This is in keeping with the funding levels established several years ago to ensure the health of this reserve fund for all capital expenditures. The Board of Selectmen, over the opposition of the two Democratic selectmen, reduced the CIP budget by 6.55% from last year’s funding, a reduction of just over 10% from the CIP committee’s recommendation. The Board of Finance rejected the proposed cuts and fully restored the CIP budget.
- School Budget: The Board of Education proposed a school budget with an increase of 2.58% over last year. The budget eliminated 7.5 teaching positions, more than double the reduction needed to reflect declining student enrollment. Almost all of the increase is due to increased costs for health insurance and contractual wages. The Board of Selectmen accepted the school budget without change, and the Board of Finance did the same.
- Total Budgets: These three preliminary budgets adopted by the Board of Finance amount to a total increase of about 2.5%, well within the range of prior budget increases, and the least we can do without serious cuts in services or impairment of our capital assets.
What’s next? On April 18, the Board of Finance will hold a final public hearing on the budget. By then, the board will have to hold a special meeting to estimate the size of the cuts in state funding. We are unlikely to know much more about the state budget at the time of the special meeting, so the board will have to make its best educated guess. Fortunately, Madison still has substantial reserve funds with which to absorb reasonable cuts from the state, but massive cuts along the lines of those proposed by the Governor would require major reductions in town and school services or major tax increases. Faced with similar uncertainty last year, the Board of Finance, working closely with the other two boards, adopted a middle course that enabled the town to get through essentially unharmed. It is not clear that we will be as lucky this year.
What can voters do? Come to the special meeting or contact the Board of Finance (with copies to the BOS and BOE) and urge that the budgets, especially the school and CIP budgets, be preserved. By a combination of a freeze in discretionary spending for the rest of this year, modest provisional reductions in all three budgets, and the application of some of the town’s reserves in some fashion to next year’s budget, we can maintain the quality of life in Madison without an excessive tax increase. The Board of Finance should not assume a worse case budget from the state, but it may have to revisit the town budgets after the referendum if the state cuts exceed reasonable expectations.