Old Lyme finalizes $38.8 million budget with 0.79-mill tax rate increase
Old Lyme — At a virtual meeting Monday, the Board of Finance finalized the town’s 2020-21 budget, setting the tax rate at 23.2 mills — 0.79 mill higher than this year’s.
The finance board was able to quickly finalize the budget after making a presentation Monday due to an executive order by Gov. Ned Lamont allowing towns to pass their budgets this year without referendum votes due to the coronavirus pandemic. The Board of Selectmen authorized the Board of Finance to adopt the $38.8 million budget and set the tax rate.
Differing only slightly from what was presented at a public hearing late last month, the finance board presented a slightly decreased 2020-21 spending plan after the Region 18 Board of Education earlier this month decreased its $35 million 2020-21 spending plan. That saved Old Lyme $160,000 from the $27.7 million share the town will pay into the district next year. Both Lyme and Old Lyme pay portions of the school district's budget based on the percentage of students from each town.
Old Lyme's overall budget, which includes general government, capital expenses and education, is 0.27%, or $109,613, less than this year’s spending plan. Government spending is expected to increase by 2.6% with a proposed $9.8 million budget, while capital expenditures are down by 19.9% at $1.4 million.
Despite the slight decrease in the overall budget, town officials still proposed increasing the tax rate by 0.79 mill, a 3.52% bump. That increase was required due to a revaluation this past year that lowered the town's grand list, Board of Finance Chairman Andy Russell said by phone Tuesday, leaving the town with a $493,987 deficit if it were to use the same tax rate as this fiscal year.
The proposed 23.2 mill rate will mean a resident owning a home with an assessed value of $243,000 will pay $5,638, or $192 more, in taxes next year, while a resident owning a home assessed at $378,100 will pay $8,772, or $299 more, next year.
In an effort to avoid an even larger tax rate increase this year, Russell told The Day the board opted to allocate $800,000 from the town’s $9.25 million surplus, as it had last year for the very same reason. The Board of Finance also has allocated another $328,500 from the surplus to help pay for Mile Creek Road Bridge repairs, $70,000 to go toward road repairs and $135,000 for sidewalk repairs on Ferry Road, which would bring the surplus total to $8.1 million at the end of the 2020-21 fiscal year, Russell said.
"We may or may not end up using all that and some might go back to the surplus," he said.
Russell also said Tuesday that because the budget was adopted by the finance board in March, "before the pandemic started," it does not include potential spending plans or savings for the coronavirus. He said the Board of Finance will "keep an eye on tax receipts in July, August and September to make sure we are tracking where we need to be. If we have to make adjustments during the year, we will make those recommendations to the Board of Selectmen."
The Board of Selectmen opted last month to offer property taxpayers a low interest rate on any delinquent tax bills, one of two relief options Lamont called for in an executive order in response to the pandemic.
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