No tax hike projected in Lyme
Board of Finance approves $10.97M plan, pending voter approval
Lyme — The Lyme Board of Finance this week approved a $10.97 million proposed 2021-22 budget that assumes a static mill rate — not the nearly 4-mill decrease that also was considered.
The budget proposal, which includes general government, education, debt service and capital spending, is up $281,410 over the current budget — an increase of 2.6%. Helping to mitigate the overall spending plan is the town’s portion of the Lyme-Old Lyme regional school district, which is slated to go down $446,686 from the current year.
The finance board voted unanimously to endorse the budget based on a plan to use the town’s healthy, $2.91 million general fund balance — also known as a rainy day fund — to absorb the increase.
The mill rate would remain at 19.95 mills but will not be official
ly set until the budget is approved by voters.
A cornerstone of the budget is $700,000 in excess revenue to be put toward paying down the remaining debt from the library and town hall campus project two years early.
First Selectman Steven Mattson said Wednesday that the decision to prepay the debt brought what would have been a modest decrease in spending to a slight increase for 2021-22.
He identified three succinct keys to this year’s budget strategy in Lyme: “budget under control, paying off debt, no tax increase.”
Mattson emphasized four of the last five budget years have not included a tax increase. “I challenge most towns to be able to match that,” he said.
Despite voting in favor of the budget, two Republican finance board members — Peter Evankow and Kathryn Wayland — expressed reservations about using the money to pay down debt instead of lowering the mill rate.
Mattson during the meeting acknowledged that applying $700,000 to a mill rate reduction would bring the current mill rate down from 19.95 mills to roughly 16.25 mills. But he cautioned that costly bridge projects being planned on Macintosh Road and Birch Mill Road could cause a mill rate spike the following fiscal year if current construction costs and timelines are realized.
“I didn’t think this board wanted to have a very volatile mill rate, which next year would go up 6½ mills,” he said.
The Birch Mill Road bridge has been closed since 2019 because of its poor condition, and the Macintosh Road bridge was subsequently downgraded to prohibit large vehicles, such as firetrucks and school buses, from crossing.
Construction on the Macintosh Road span is anticipated to begin in spring 2023 for a total of roughly $2.5 million, according to Mattson. The federal government is set to reimburse the town for 80%, or approximately $1.9 million, of the cost. He said the smaller Birch Mill Road project, which is under state purview, has been slower to secure funding approvals from the Connecticut Department of Transportation. Preliminary designs indicate an estimated $1.1 million cost, with the state expected to reimburse the town for 50%.
Mattson said money that originally had been set aside for bridge construction, which will not end up being spent in the upcoming fiscal year, made it possible to pay down the debt instead.
Evankow questioned the decision not to pass the savings back to taxpayers amid a pandemic that’s been a struggle for many people. “I personally would like to see the mill rate go down,” he said.
Wayland said she doesn’t believe in “holding the taxpayers’ money hostage” for a year amid unpredictable factors such as the pandemic and construction timelines. “If you have the ability to give it back to the taxpayer this year, it’s the right thing to do,” she said.
Finance board Chairman Dan Hagan, a Republican, argued that Lyme’s revenues do not seem to have been affected by the pandemic.
He pointed to a low interest rate program instituted last April as part of an executive order from Gov. Ned Lamont that allowed towns to reduce the interest rate from 18% to 3% on overdue taxes.
“We implemented it thinking we were doing a good thing for everybody, and it turned out very, very few people in Lyme needed to take advantage of that,” Mattson said. “I’m not sure why or how, but we were spared a big financial impact from COVID.”
According to Mattson, collection rates have exceeded 100% in each of the past three years due to enhanced efforts to recoup back taxes.
A virtual public hearing on the budget will be held Tuesday, April 27, via Zoom. Officials said taxpayers will be able to email comments to be addressed at the public hearing. More details will be released soon on the town’s website, townlyme.org.