BERLIN – Just two years after it was approved, the town’s tax rate review policy is drawing criticism from elected officials.
As the Berlin Town Council prepared to vote on a tax rate Monday, several council members expressed frustration with having to set the tax rate so early in the budget process. The current budget schedule — and its mandated adoption of a tax rate by the second meeting in March — was developed in accordance with the tax rate review policy approved two years ago.
“This process was based on a resolution passed by the mayor and council in 2019,” Deputy Town Administrator Mary Bohlen said. “You, of course, have the right and ability to amend that process.”
In 2019, following a contentious budget process, the council adopted a policy setting a schedule for an annual tax rate review. The resolution states that the town council will review Berlin’s short- and long-term financial projections at or before the second meeting in January.
At or before the second meeting in February, officials will set the date for the tax rate public hearing. The resolution goes on to state that the public hearing for the tax rate and the decision on it shall come no later than the second meeting in March.
“The idea here is to schedule an ongoing rate review and review of short-term and long-term financial projections and to have the tax rate set early enough in the budget process to be able to have the department directors build their budgets with the tax rate that you set,” said then-town administrator Laura Allen in 2019.
When a citizen asked this week why the tax rate had to be set before the budget was developed, Finance Director Natalie Saleh said it was because the tax rate was tied to the town’s main revenue. She said because property taxes made up the majority of general fund revenue, the town needed to know what its tax rate would be to establish revenue estimates.
“In the past … we would go over the budget process and we would draft the budget and leave the tax rate to the very last,” she said. “There were some years we adopted the tax rate in the same meeting with the budget which creates basically kind of contradiction of what we’re trying to do.”
She said officials thought it would be more helpful to do a preliminary budget and a tax rate “side by side.”
Councilman Jack Orris, who has questioned the schedule before, again said he thought the process was flawed and should be reconsidered moving forward.
Councilman Jay Knerr agreed.
“I’m concerned about how this process went down,” he said. “It was a very difficult process. It truly seems backwards.”
While he wanted to make a motion to change the process, Mayor Zack Tyndall said it would take more than a motion, as the town had a resolution in place governing the process. Bohlen said she’d share the text of the resolution with all of the council members so it could be reviewed.
Town Administrator Jeff Fleetwood said the council could consider amending the timelines in the resolution if members were interested.
“It would be up to you if you wish to discuss it,” Bohlen said.
The council agreed to review the resolution at its next meeting.