As a result of high levels of inflation and new investments toward initiatives, the City is projecting a $7 million gap for our Fiscal Year 2023 budget, which is projected to be approximately [total GF budget]. The Mayor and City Council are proposing a $.04 tax increase in order to generate $2.2 million of new revenues for the City’s general operating budget.
Due to the changes in the grand list following the Citywide reappraisal and the School District’s proposed 7% rate decrease, a $.04 tax increase would still lead to an overall property tax decrease from FY22.
|
|
Est Homestead |
Municipal |
Total HS + Muni |
Total Tax Increase |
% Muni Increase |
% Total Increase |
|
FY22 |
$1.4553 |
$0.6701 |
$2.1254 |
|
|
|
|
FY23 est |
$1.3534 |
$0.7181 |
$2.0716 |
$(0.0538) |
6.70% |
-2.60% |
The City strives to provide quality services to all residents and businesses in Burlington at a tax rate that is reasonable and affordable.
For the third year in a row, Burlington’s municipal budget is significantly affected by the pandemic. The Fiscal Year 2023 budget is complicated by three major challenges:
1. Inflation. From December 2020 to December 2021, the United States has seen record 7% inflation which affects costs for everything the City pays for, including benefits, consultants, supplies, and materials.
2. Incorporating recent equity investments into the structural budget. During the FY22 budget process, the Administration outlined that our new investments of $1.9 million in equity would require ongoing local funding. These equity investments are critical to the future of our community and we are seeking ways to integrate them structurally into the General Fund budget without a substantial tax increase.
3. Pandemic-impacted revenue shortfalls. Many of the City’s revenue sources, including boat slip rentals, gross receipts, and donations, have seen decreases throughout the pandemic.
These challenges have led to an approximate $7 million increase in costs to the general fund budget.
|
Items from FY22-23 that Need Funding |
Approximate Amount |
|
Wages and Other Inflation |
$5,250,000 |
|
Expanded investment in racial equity + justice (including new public health investments) |
$1,250,000 |
|
Pay every City Employee the Livable Wage |
$290,000 |
|
Compensation for board and commission members |
$150,000 |
|
Support for the Trusted Community Voices |
$38,500 |
|
Expand diverse recruiting initiatives |
$25,000 |
|
Accessibility Committee |
$15,000 |
|
TOTAL |
$7,018,500 |
The Administration plans to fill the $7 million gap using three strategies:
1. Creating Revenue Replacement Reserve using ARPA funds. The Administration is proposing creating $3 million Revenue Replacement Fund with ARPA dollars in case our projected revenues are not realized. If we do meet our revenue goals, these funds will be freed up for other community priorities.
2. Use ARPA funds to help General Fund absorb equity investments. The Administration is proposing using $1.2 million in ARPA funds in FY23 to help the General Fund absorb these important investments without a sudden large tax increase. They would phase out over time.
|
|
ARPA |
GF/Fundraising/Other |
Total |
|
FY23 |
$1,200,000 |
$700,000 |
$1,900,000 |
|
FY24 |
$800,000 |
$1,176,000 |
$1,976,000 |
|
FY25 |
$0 |
$2,055,040 |
$2,055,040 |
3. Tax rate increase. A $.04 municipal tax rate increase would generate an estimated $2.2 million for the City’s General Fund.
