Berlin Cuts Spending By 12%

BERLIN – Despite an
overall decline in revenue, driven largely by a continued drop in the town’s
assessable real estate base, Berlin officials this week introduced a budget for
fiscal year 2011 that includes no tax rate increase for local residents.

The Berlin Mayor and
Council on Monday formally introduced the proposed fiscal year 2011 budget,
which comes in at about $12.4 million. The proposed budget declined from the
current year by around $1.4 million, or about 12.4 percent less than the
current year spending plan.

Nonetheless, town
officials said on Monday the decline in revenue has not prompted a decision to
increase the current property tax rate, set at 73 cents per $100 of assessed
value. If Berlin maintains the current property tax rate, the estimated real
property assessable base will decline from a little over $412 million to just
over $376 million, or just about 9 percent. However, there is no political will
to increase the tax rate to match the current revenue levels, commonly known as
the constant yield rate.

The constant yield is
the tax rate needed to match the prior year’s revenues and local governments
are legally allowed to increase property tax rates to meet the revenue levels
of the prior year. In Berlin’s case this year, the property tax rate would have
to be increased to 80 cents per $100 of assessed value to match the $412
million collected in property taxes in the current year.

However, given the
current economic climate, and the fact it’s an election year, Berlin’s elected
officials on Monday announced the property tax rate will remain the same,
although it was not formally voted on and won’t be until after a public hearing
on the budget and the constant yield rate later this month.

Instead the town has
found other ways to make up the estimated $265,164 decline in property tax
revenue caused by maintaining the current tax rate.

“Basically, the budget
is about 12-percent less than it was in the current year,” said Mayor Gee
Williams. “We’ve found other ways of making up the difference without raising
the property tax rate. For example, there will be no raises for town employees,
and we aren’t filling several existing vacancies.”

A public hearing on the
budget and the constant yield rate will be held at the next meeting on May 24,
and the budget is expected to voted on at the June 14 meeting. Williams said
there was ample time available for the public to weigh in on the proposed
spending plan.

“Anybody interested in
this budget should pick up a copy and read it over,” he said. “We certainly
welcome any public comments …”

 

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