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SOUTH KINGSTOWN â While Governor Lincoln Chafee is proposing $88 million in tax hikes, in South Kingstown, Town Manager Stephen Alfred said there will be no more tax increases next year.
The good news is a testament to the townâs approach to handling its finances with a low bond debt and a highly funded pension system.
Monday nightâs meeting marked the first of four budget workshops scheduled before the adoption of the preliminary budget on March 19 at 5 p.m. at the Town Council Chambers. The public will have the chance to weigh in at two public hearings with the school committee on April 10 and 11. The council will consider petitions and adoption of the final budget on April 30.
With next yearâs budget expected to be $323,622 less than the current years, Alfred laid out the budget message for the eight municipal funds.
This year, Alfred proposed a FY 2012-2013 capital budget that is $29,000 less than the current year. Another $500,000 in revenue was used to offset an equal amount of property tax support associated with the capital budget.
The total municipal program is expected to be $165,954 less than the current year. For FY 2012-2013, a total general fund program in the amount of $73.3 million is proposed. This represents a $43,138 decrease from the current year. In addition, the school fund went down $184,145 from the previous year.
To support appropriations next year, a property tax rate of $14.51 per thousand dollars of assessed valuation, the same as this year, is necessary. The school related tax will decrease by $0.12 per thousand dollars below the current year rate to $11.08. The town-related tax rate is projected at $3.43, an increase of $0.12 per thousand.
While many cities and towns grapple with bankruptcy and bond debt, South Kingstown chose to push off debt service for capital projects to the 2012-2013 year.
âThis is planned as a means of dealing with tough economic times. We have tightened our belt,â Alfred said.
Next year, the property tax rates needed for total debt service will be less. Total debt service will require a property tax rate of 0.50 cents per thousand dollars of assessed value, which is 10 cents less than the current year rate. School-related debt service will cost 0.31 cents per thousand, another 10 cent decrease. The municipal debt service requirements will require a tax rate of 0.19 cent, the same as the current year.
So far, the motor vehicle roll is projected to increase by about $10 million over the current year roll value of $169 million and uses an exemption value of $3,000 per vehicle. However, this may change since the General Assembly is considering revising the current methods used to establish the taxable value of motor vehicles. According to Alfred, reducing the motor vehicle assessment values from âaverage retailâ to âtrade-inâ price could reduce the value of the motor vehicle taxable property roll by as much as 20 percent.
The property tax roll related to real estate and personal property is $4.3 billion, which represents an increase of $7.3 million over the current year.
Not only does South Kingstown differ from the state in its plan to not raise taxes, the town also faces much more optimistic prospects in regards to its pension fund.
In November 2011, the General Assembly approved pension reform with the aim to get state administered retirement plans at the 80 percent funded level. At a funded ratio of 91.8 percent, South Kingstown has far exceeded the state requirement. This breaks down to an 87.8 percent funded ratio for police retirement fund, 145.4 percent for EMS and 91.8 percent for municipal.
âWe have always made our full payments. All of our retirement groups are funded in excess of 80 percent,â Alfred said.
Next year the cost for the $10 million personnel will increase by 1.6 percent of $169,791. The number of full time employees budgeted is 166.95, a reduction of one FTE from the current year. This reduction represents a reduction of a full time librarian to a part time position.
While the town is proposing no new taxes on the municipal side, the South Kingstown School Committee is requesting $747,519 more in property tax support for next year. This increase would require a 0.12 cent increase from $10.79 to $10.91 per thousand dollars of assessed value. In general, the majority of taxes raised do support the school system. The town, however, is proposing to reduce the school committee recommended budget by $560,196.
Though the governor proposed to advance $11 million in additional local education aid, these funds are earmarked to accelerate payments to those school districts that are underfunded according to the new funding formula. South Kingstown will actually receive $331,361 less in general state aid than was received in the current year.