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An unexpected windfall in Groton

By Deborah Straszheim

Publication: The Day

Published March 15. 2014 4:00AM

Groton - The town manager's proposed $122.84 million budget for the coming fiscal year represents a dramatic shift in the revenue picture for Groton, as the budget would increase spending, hold the tax rate steady and yet set aside $1.8 million in each of the next two years to offset losses from the demolition of Pfizer's Building 118.

Instead of seeing a $2.2 million drop in funding as town officials expected last year, Groton now has $4.2 million to decide what to do with.

"It's nothing magical," Town Manager Mark Oefinger said Friday. "The economy's picking up, we ended last year in a cash positive position because of dollars being returned that weren't being spent in 2013, and had an increase in revenues."

Oefinger's proposed budget, distributed to councilors Friday, would increase spending by $2.88 million overall, or $2.4 percent, but keep the tax rate the same by using $1.45 million of available money for this purpose.

The budget would also increase the total amount the town sets aside in its "unassigned fund balance" to improve its standing with bond rating agencies, and hold onto $1.8 million for each of the next two fiscal years to protect Groton from the initial hit of tax losses from Pfizer tearing down its former research headquarters on Eastern Point Road.

Oefinger said a combination of factors led the town's changed financial outlook. Revenues came in better than anticipated. Groton collected $1.2 million more in general property taxes than expected; $2.28 million more in total state grants in aid; $936,000 more in federal grants; $25,000 more in permitting and licensing fees; and $10,000 more in investment, for example.

The Oct. 1, 2013, grand list went up about 1.1 percent, where it fell 1.3 percent the previous year.

Oefinger also said that next year, "we're anticipating we're going to receive an increase in revenues."

The proposed spending plan calls for no additional full-time staff or cuts to staff, so the number of town employees would remain the same at 266.

The budget would increase spending by $521,404, or 1.6 percent, for town operations; by about $1.44 million, or 1.9 percent, for education; by $839,737, or 13.5 percent, for capital spending and debt; by $40,140, or 0.8 percent, for the subdivisions including Groton City and Groton Long Point; and by $31,185, or 1.5 percent, for outside agencies.

Much of the increase to town department spending appears in three areas: voter registration, finance administration and public safety. They were largely offset by cuts or zero increases in eight of the town's 15 departments.

The town manager said setting aside money to cushion the blow of the tax losses from Pfizer seemed a better decision than simply cutting taxes.

"You could take $4.2 million, and that is a little bit more than a mill, and provide a tax break," Oefinger said. "That, in my mind, didn't seem like a prudent idea when we're faced with a $1.8 million tax hit in 2015."

d.straszheim@theday.com

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