Mayor’s budget advances key priorities amidst historic inflation and post-pandemic volatility in City revenues; Uses non-service-related spending cuts, federal investment, and one-time funds to lower taxpayer impact
Burlington, Vt. – At its meeting tonight, the City Council approved the Mayor’s Fiscal Year 2024 (FY24) budget by a 10 – 2 vote. Councilors went on to approve the accompanying resolution to set the municipal property tax rate, which raises 42% of funds for the coming year’s public expenditures, by a vote of 9 – 3. Despite historic inflation and lingering pandemic impacts to City revenues, the Mayor’s budget advances key priorities for Burlingtonians, including in the areas of public safety, climate action, racial equity, affordable housing and homeless initiatives, and to combat the opioid crisis. The FY24 budget deploys roughly $750,000 in non-personnel and non-service-related spending cuts, federal relief dollars, and other one-time funds to mitigate taxpayer impacts, and funds multiple studies of City operations and revenues to prepare for future year budget challenges.
“This budget reflects the clear priorities of our community while acknowledging the real concerns of taxpayers as we continue to face uncertain and challenging economic times as Burlingtonians and local businesses work to recover from the pandemic and absorb the debt burden of the new high school,” said Mayor Miro Weinberger. “Despite severe and sustained inflationary pressures across all City operations, with this budget we will make new investments in the coming year to rebuild and expand our police department, maintain our historic levels of infrastructure investment, and retain all current City employees and public services including to support our ongoing work to advance racial equity and to achieve a Net Zero Energy future, while minimizing increases to taxes and fees.”
A Challenging Budget Period
Factors contributing to challenges in the FY24 budget, and likely future years, include:
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Inflation-driven COLA increases across all unions for FY23 and FY24 add substantial costs to the operating budget.
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Increases to most of the City’s non-personnel operating costs are driven by significant and sustained inflation rates (an average of 8.0% across all months in 2022, and 5.26% across the first 5 months of 2023).
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We are in the third and final year of phasing out federal support for dramatically expanded city-wide equity initiatives, including the creation of the Racial Equity, Inclusion, and Belonging (REIB) Department, paying board and commission members, our language access program, and paying all City employees a livable wage. In FY22 the General Fund budget allocated $2.76M to launch these initiatives, the FY24 the budget commits only $800k of federal dollars to REIB and $170K to CEDO to support these initiatives.
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Pandemic-impacted revenue shortfalls persist across numerous sources, such as boat slip rental at the waterfront and parking across the City.
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Our largest revenue source, property taxes, can only increase by 1) growing the Grand List (which historically drives a <1% increase in tax revenue per year) or 2) voter-approved tax rate increases.
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Rebuilding of police officer ranks (in alignment with the Rebuilding Plan, the budget assumes 7 additional officers in FY24), hiring three new firefighters, and fully staffing the CSL (6) and CSO (11) programs, also contribute to considerable public safety cost increase.
Significant Public Investments in FY24
Despite the major challenges detailed above, the FY24 budget avoids any service cuts, layoffs, or hiring freezes on existing positions and will continue to forge critical progress in our highest priority areas, including:
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Robust investments in green stimulus incentives for BED ratepayers and work underway to ready the electric grid for future increased electricity demand will continue, funded in part by the voter-approved $20 million Net Zero Energy Revenue Bond passed in 2021.
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Expanded resources, recruitment tools, and new hires for public safety, including $1.3 million of increased Police Department personnel costs, and $950,000 of increased Fire Department personnel costs.
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Major public infrastructure investments supported by the 2022 voter-approved Capital Bond, federal and state awards, and more than $1 million in Street Capital funds for paving and large patching repairs.
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New deployment of $183,000 in annual Opioid Settlement funds to support the City’s expanded efforts to advance harm reduction and expand access to medically-assisted treatment and contingency management.
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A $1.7 million budget for the Racial Equity, Inclusion, and Belonging Department, which includes the structural reorganization of 10 full-time employees to advance the Department’s key initiatives, including cultural events, programs to address racism as a public health emergency, the continuation of the Empowerment Fund, and the planned Neighborhood Equity Index.
New Property Tax Rates and Preparing for Future Budget Years
The FY24 budget is level funded and will require an increased tax rate of $.7523 from the FY23 tax rate of $.7082 -- or an increase of 6.2%, which is comparable to this year’s projected State Education tax rate increase. This includes an addition of $.05 to the dedicated Street Capital and Greenbelt tax to increase patching and paving, and an additional $.02 to the dedicated Parks tax which will generate an additional $1.1 million of revenue to pay for BPRW expenses the City is already incurring.
The total year over year increase in the municipal property tax rate represents a $13.60 per month, or $163.20 per year, increase for homeowners with a home with median tax assessed value of $370,000.
The budget also funds several studies that will analyze cost-saving efficiencies in City government and explore new potential revenue sources other than the property tax, including:
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Fleet Management Study to establish sustainable funding for City vehicles.
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Operational analysis of City operations to ensure functions aren’t duplicated across the City and to increase inter-department efficiencies.
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Continued support for the Impact Fee Study (for which the City allocated $100,000 in FY23) so that a leading expert firm can advise the City and CCRPC on an update of our impact fee program.
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Financial Sustainability Study for CEDO funded by HUD.
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