Surpluses Reflect Overcharging
POINT 1: Spending Drives Taxes
Spending levels drive taxes. Seemingly small increases in spending will – over time – make a major difference in the taxes you pay.
EXAMPLE: As in our Home environments, prudent government spending is its own reward. Say you pay $7,000 annually in Town taxes today. At 4% spending increase per year, after 10 years Household #1 would have paid a total of $94,404. At 1% increase, Household #2 would have paid $80.968, less by $13,436. On a comparative basis, the 1% Household would pay NO TAXES for nearly TWO YEARS compared to the 4% Household. It’s a highly tangible objective to strive for.
POINT 2: AMITY SURPLUSES ARE RAISING YOUR TAXES
In the last 15 years, Amity has AVERAGED 1,508,000 in SURPLUS each year. In the last 4 years, Amity has a TOTAL aggregate surplus of $10,403,032 averaging $2.600,758 per year. Since Orange pays 50% of Amity, that means Orange taxpayers have spent $1,300,000 in TAXES in each of the LAST 4 YEARS for what ended up being a SURPLUS. These amounts are an UNNECESSARY burden to every taxpayer of Orange.
These stunning SURPLUSES occurred even as seemingly low % Budget-to-Budget increases suggested a frugal environment. An inquiring mind may well ask: how could there be such overwhelming Surpluses when Budget increases are low? Let’s take a close look at the data.
As can be seen from the % increase ACTUAL-to-Budget, Amity budgets are far more expansive than commonly understood. For example, in the 4-years from FY 2015-2016 to FY 2018-2019, the average Budget-to-Budget increase was 1.6%/year. However, the Actual-to-Budget increase was 5.6%/year, more than 3 ½ TIMES the 1.6%/year Budget-to-Budget rate!
Kevin Moffett, long-time OBOF member, put it this way: “Budgeting should be based on ACTUALS because – as seen by the Amity surpluses – the prior year’s budget is inflated to begin with.”
POINT 3: OBOF Position on AMITY Budgets
On 01-04-21, the Orange Board of Finance (OBOF) unanimously voted to support a 0.47% budget increase for Amity in FY 21-22. As explained in the last article (01-15-21, Orange Town News), Amity’s current budget (FY 20-21) contains a 10.16% increase from Actual-to-Budget.
On 01-25-21, the OBOF learned from Amity Superintendent Jenn Byars that Amity is proposing a 3.72% “Budget-to-Budget” increase for FY 21-22. The impact of this Amity budget request would increase TAXES $718,848 in Orange. Moreover, Amity presented a 4-year “forecast budget” that would increase TAXES in Orange by over $4,000,000.
Kevin Houlihan, Chairman of the Orange Board of Finance, expressed a growing concern, “The continual overbudgeting at Amity filters down to our Town Departments and the Orange Board of Education. in essence, Amity is taking money – that only results in surplus—that could be deployed elsewhere.”
CURRENT SITUATION: The OBOF supports an Amity FY 21-22 budget of $51,023,196, a 0.47% increase. Further, the OBOF unanimously supports the return of ALL FY 20-21 Amity surpluses to the member Towns.
By Jim Leahy, Vice-Chairman, Orange Board of Finance