Modest Tax Increase in Proposed Town Budget

By Cynthia Drummond for BRVCA
February 29th 2024

RICHMOND – The process of preparing the town’s budget has begun, and it will be the budget exercise for Finance Director Laura Kenyon, who recently announced that she will be retiring in May. Kenyon has served as the town’s Finance Director for five years.

Dubbed the “Town Administrator” budget, because Town Administrator Karen Pinch will present it to the Town Council, the Fiscal year 2024-25 spending plan is far from final. Members of the town’s Finance Board held their first meeting to discuss the proposed budget only recently, on Feb. 26.

Municipal vs Chariho

The budget has two distinct components: municipal, which the town controls and education, over which it has little control.

“Very little has changed on the municipal side of the budget on the expense side,” Kenyon said. “The Chariho budget, the town has very little say as to what the dollar amounts are going to be, so we just put those into our budget.”

The Chariho budget is expected to change. The amount of state aid to the school district will not be known until the General Assembly approves the state budget in June. In addition, the outcome of a proposal to borrow up to $150 million to build three new elementary schools to replace the district’s four aging school buildings is in doubt, facing stiff opposition, particularly in Richmond and Hopkinton.

Richmond’s proposed budget contains just under $22 million for schools, an increase of $233,799 over the current year. Recently, however, the school committee added funds back into the Chariho budget for repairs to Hope Valley Elementary School, so Kenyon said the final figures are still to be determined.

“They’re still not set in stone,” she said. “We’re still waiting for the Governor’s budget to be approved, and we’re still waiting for the School Committee and the residents to vote on the school budget.”

Property Taxes

The proposed budget contained good news for homeowners, a decrease in the property tax rate, from the current rate of $14.75 to $14.68. But that changed when the School Committee returned $437,000 to the Chariho budget for repairs to Hope Valley Elementary School. That amendment will result in a slight increase in the property tax rate, to $14.80.

Disgruntled taxpayers have stated, incorrectly, that taxes have increased by 80% over the past decade.

After conducting an analysis of town budgets from 2012 to 2024, Kenyon said it was important to make a distinction between the municipal budget as a whole, and that portion that comes from property taxes. While municipal budgets have increased by 81%, taxes have increased by only 29%.

“The municipal budget has increased from $4.2 million in Fiscal year 12 to $7.7 million in 2024, which is an increase of $3.5 million, or 81%, however, revenue from taxes has gone from $15.8 million to $20.3 million for an increase of $4.5 million, which is a 29 % increase in taxes,” Kenyon said.

“The taxes haven’t gone up that much,” Town Council President Mark Trimmer added. “It’s unfortunate for the town employees that the wages haven’t gone up that much, either. The only advantage we have to offer anyone is that it’s a low-stress environment, and that’s changed with the new politics in town, which is really unfortunate. And so, we’re going to continue to lose people.”

Kenyon’s analysis can be viewed on the town’s website under the tab: “Budget Analysis FY-12 to FY-24.”

The Municipal Budget

The municipal budget, at the time of this writing, will be $7.9 million, an increase of $192,789 or 2%. That total includes $1.8 million in state aid, $3.9 million in town taxes, and a fund balance, or surplus, of $309,948, or 16.2%. The town could tap into the fund balance if the expected state aid, either to Chariho or to the town, is significantly reduced, but it is standard practice to maintain a fund balance of two months of reserve, or 16.6%, so there isn’t much leeway.

There have been no new hires, but other factors have contributed to an increase in personnel costs: A 3% cost of living increase on wages, and an increase of 10% in the cost of health and dental benefits.

Operating Expenses

The town has budgeted an additional $8,000 for legal services for the upcoming police contract negotiations, but by far the biggest increase has been the cost of electricity, which has gone from $.06 per kilowatt hour to $.12.

“One of the major increases in this year’s operating budget is the doubling of cost for electricity,” Pinch said.

Pinch also noted that the budget for upcoming elections will also increase.

 “With this being a presidential election year, in addition to local races and referenda, our costs for election officials has increased significantly,” she said. “This is compounded by the mandate for 20 days of early voting for some of these.”

The town’s budget for election officials is $14,050, a 140% increase over the current year. The budget for election supplies, such as ballots, has increased by 200% to $1,500.

Capital Improvement Plan

The capital budget is level funded at $9,570,864.

The budget allocates $2.5 million for road repairs, which are funded by a voter-approved bond. Debt service on the bond is $300,000. The other large capital expenses are $529,694 for public works equipment replacement and $102, 847 for the replacement of police vehicles.

Trimmer said he was grateful to town employees for keeping expenses down.

“It’s a very lean budget…and I feel that our town employees are incredibly responsible and frugal when it comes to spending money,” he said. “With unfunded [state] mandates, it does cost more to run a town than it used to, but we’ve found work-arounds and we still run like a small town, which is a good thing.”

The Budget Timeline

March 5: Public hearing, Chariho Budget

April 9: Chariho budget referendum

April 10: Town Council budget workshop

April 16: Budget public hearing

May 7: School bond referendum

May 8: Budget public hearing

June 3: Richmond budget referendum