City homeowners will see a slightly smaller tax bill this year.
The Board of Aldermen voted Monday to set the municipal tax rate at $1.7763 per $100 of assessed property value — a decrease of roughly three-tenths of a cent. With the state-set homestead rate also down on the education side of the bill — $1.4577 from $1.4639 — homeowners with a $150,000 house will see their combined tax bill drop from $4,864,65 to $4,850.99.
The non-residential rate, however, went from $1.5579 to $1.6033 — a change that Alderman William Gillam noted applied to apartment buildings as well as retail and industrial properties.
“That’s not just hurting businesses,” he said. “That’s hurting renters in the city of Rutland.”
The board also returned the unassigned fund balance — surplus money used as the city’s cash on hand — to 10% of the budget, keeping with a policy established in 2010 but effectively suspected for the last two years. Where to put the fund balance was the subject of the only debate over the tax rate, with Mayor David Allaire and a handful of aldermen arguing to hold it at 9% another year in order to further buy down the tax rate.
City Treasurer Mary Markowski said she felt that with the city running a surplus — partly due to an increase in revenues and partly due to insurance premiums not going up as much as anticipated — she felt it was the right time to get the fund balance back up to 10%. She said the fund balance allows the city to operate without short-term borrowing and that she did not expect to see further savings on insurance.
Alderman Tom DePoy, however, argued in favor of keeping it at 9%, which would have boosted the tax savings on a $150,000 house to about $46.
“I hear where Mary is coming from and I heard (former Treasurer Wendy Wilton) when she was talking all those years ... but when you’re talking about giving people a $46 reduction instead of a $13 reduction ... they’re both worth their weight in gold,” he said.
Alderman Chris Ettori replied that they first reduced the fund balance in the face of a 6% budget increase and kept it down when the budget went up another 12%.
“That was not the time to move it back to 10 percent,” he said, recalling that the 10 percent minimum was widely recommended by financial experts when the board set the policy. “It’s a slippery slope, to always be chasing that extra $25 a year.”
Allaire said the taxpayers had taken a series of hits in recent years and that spending more from the fund balance would give them some relief.
“We’re very fortunate with increased revenues and I think that’s going to be a trend over the next few years,” he said. “Nine percent has been what we used for the last two years. We have not come close, that I know of. to having to go out for short-term borrowing. ... I’m comfortable at 9%.”
Alderman Scott Tommola wasn’t, calling it “bad business.”
“You have to have that security to get things done and you have to have that cushion for when things happen,” he said. “I don’t think the difference between 9 and 10 is going to be that appreciable on the tax bills.”
Alderman Rebecca Mattis said that she remembered the discussion from two years ago and had thought about the decision to put the fund balance at 9% over the last year.
“Our treasurer, every time she speaks, says she’s concerned about that decision,” she said. “I don’t like feeling like we’re on thin ice. We got lucky with our health care budgeting and we’re not always going to be that lucky.”
DePoy’s motion to set the tax rate with a 9% fund balance failed when only Aldermen William Gillam and Paul Clifford voted alongside him. A motion by Mattis to set it with a 10% fund balance was then approved by voice vote.
