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City Budget Increases 0.6 Percent Over Last Year

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The city budget, which will be on the March 2 Town Meeting Day ballot, was crafted under the most financially difficult circumstances that I have seen during my time on the City Council. I want to give you some background as to what’s in it, what’s not in it, and how the City Council came to make those decisions. 

In the past, there have been times when I advocated for budget increases around 3 percent, but not this year. With the pandemic causing unemployment in Montpelier to spike up to nearly 14 percent this past summer, and many homeowners and tenants still recovering from financial shocks, this did not feel like the right time for a normal increase in property taxes. This year, including the separate balloted items for Central Vermont Home Health and Hospice and the Kellogg-Hubbard Library, together with the city budget represents a 0.6 percent increase, which is less than the rate of inflation for the past year. Even if we had kept the property taxes level, that still would have meant a decrease in spending, as the city is estimating a $1.4 million dollar shortfall in non-tax revenue (out of a roughly $15 million dollar budget). Effectively keeping property taxes flat from last year would equate to a 9 percent cut in spending. 

There are two general categories that we can look at to find such significant spending cuts: jobs and capital projects. In deciding between the categories, we looked at the projected duration of pandemic-related restrictions. 

If we anticipated that the pandemic would go on for multiple years, the difficult but rational decision would be to cut positions, especially as certain types of city services might continue to be restricted. In this scenario, we would have to take a hard look at the core services of the city and consider what positions were essential for delivering those core services. 

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However, if the pandemic-related restrictions were more short-term, likely to be relieved within a year or so, then we could look at pausing capital projects for this coming year, and pick up projects again when the economy recovered. 

At the time that we were making this decision between how to approach significant spending cuts, a vaccine had just been approved and so we were and continue to be hopeful that the COVID restrictions will lessen over the coming year. We went with the second scenario, in which delaying capital projects in the short-term is appropriate. Yes, this does mean that we will have to pick up the slack in a future year, but we are going into that eyes-open, anticipating that we’ll likely have a bond in a future year to catch up on construction projects. 

Planning for a $1.4 million revenue drop was our projected worst-case scenario. If the pandemic restrictions end sooner, the state opens up, and our economy recovers more quickly, then we will be able to look at adding back projects into the FY22 schedule. Just for context, the projects that we’re talking about here are mostly pavement and retaining walls. Water and sewer infrastructure is paid for out of separate water and sewer funds, which are supported by water and sewer fees, not property taxes.  

Through this difficult budget cycle, we were able to maintain funding for all of our city services. We included funding for the Montpelier Community Fund, which supports many local nonprofits that serve the Montpelier area. We also included funding for the Housing Trust Fund, and the Social and Economic Justice committee has been funded to continue to work with a consultant to do a needs assessment for the city. New as of this year, we set aside money to support Capital Area Neighborhoods, which the council sees as an important avenue of communication between the city and residents. Additionally, it builds community resiliency and can provide a means of connection during a time of unusual and significant isolation. 

Every year as a part of the budget process, the council fills out a survey about their priorities for what they would like to see in the budget for the upcoming year. This was the first year that we also put out a public survey, which helped inform our budget decisions. Thank you to everyone who took the time to share your thoughts! I suspect that this will be a practice that will continue on into the future. During our budget process there were some public comments and questions about the police budget, and that is certainly worth noting. This FY22 budget does not have any new police equipment or vehicles, and we are holding one officer position vacant for the year. At the same time, we maintained funding for a social worker embedded into the police department. This budget also includes paying for a position dedicated to outreach to our homeless population, through our Homelessness Task Force. The Social and Economic Justice Committee provided the council with an equity framework that we used to examine our budgetary choices, and we found that tool useful for reflection on what was left in and what was left out of the budget and the impact those decisions would have on vulnerable populations. 

All things considered, I’m pleased with how this budget came out. I’m glad that we were able to maintain city services without reducing positions. I am proud of the work that the city staff and council did to craft this budget. I’m also eager to see how our revenue projections compare to reality. The silver lining through all of this has been that these changing circumstances have forced us to re-examine old practices in a new light. We have had to adapt to this new reality, and I’m certain that we will continue to adapt to make the city work for its residents and businesses. 

If you are registered to vote in Montpelier, you may have already received a ballot in the mail, but you can also still vote on Town Meeting Day, March 2, at City Hall. This will be the first time that ballots have been mailed to all registered voters for a Town Meeting Day election, and we anticipate that this will increase participation significantly compared to other Town Meeting Days. Make sure that your voice is heard and vote either by mail or in-person on March 2!