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It's Never Too Early To Talk About the Town Budget . . . But it Always Seems Too Late!

It is never too early to talk about the Town Budget . . . but it always seems too late!

Last May, some members of the RTM moved to approve the Town operations portion of the budget in one number, which would have saved the taxpayers tens of thousands of dollars. 

The motion was defeated.  However, there were some members of the RTM and the Town Council who commented that even though they did not support that specific idea, they did appreciate that there was some thinking “outside the box” so to speak in order to try to control spending. 

At the October 2012 RTM meeting, I shared two core elements of the budget process that I believe are cause for concern.

The first is that every line item is presented and valued with the same level of importance and priority. It is not rational or common sense thinking that every expenditure should hold the same level of importance. I believe this not productive as it does not allow for honest discussion of the actual need of that particular item.

As has been stated in the past, there needs to be a discussion regarding what the 'needs' verses 'wants' are of the Town of Groton.  Is it essential, or is it nice to have?

This is a difficult task and hard decisions will need to be made, but the current fiscal spending path is not sustainable. 

The second element of the budget process which I believe is cause for concern is the notion that “decreasing the yearly increase” in budget line items is a “cut”.   Over time, the town and the Board of Education have created a yearly scenario whereby "cutting the rate of growth" or "decreasing the increase" is considered "cutting the budget". 

But that is not correct. Cutting the rate of growth of the budget is not cutting the budget.

The current way of thinking that “reducing the increase” of a line item is a “cut” stifles any possibility for “out of the box” thinking toward controlling spending - as most elected officials are reluctant to “cut” anything.

The financial situation in Groton is not good.  Yearly revenues are decreasing with no corresponding decreases in spending.  Things do not look like they are going to get any better.  In fact, with what is happening with Pfizer here locally as an example, and with the state and national budget problems, things are probably going to get worse.

Budgets are going are going to have to be reduced and priorities are going to have to be established that were not the priorities of the past. 

One possibility to consider is priority-based budgeting.

Priority-based budgeting requires towns to first identify revenues that will be available in the new budget, rather than the amount of money needed to fund a particular service.

Traditionally, expenditures for a service are calculated and a request for that amount of funding is made by a department for the coming budget year. Priority-based budgeting calculates the revenues a town can expect, then adapts spending to within that amount.

This “live within your means” approach encourages a deeper evaluation of the costs and importance of a particular service.

Also, priority-based budgeting demands results.

Traditional budgeting allows that if a department stays within its budget - regardless of whether the service it delivers actually provides positive outcomes - it is successful.  Think about that.

Priority-based budgeting not only requires fiscal accountability, it requires the service demonstrate the measurable, successful outcomes it promised when it was funded. Without demonstrating success, a service may not be funded at the same level in future years.

Priority-based budgeting may be a departure from the traditional way towns have crafted budgets over the years. But as revenues decrease and expenditures increase, many towns have embraced priority-based budgeting as a good way to provide services at affordable levels while controlling spending.

Another possibility to consider is zero-based budgeting.  Zero-based budgeting is a method for managing a budget that requires accounting of all expenses in a new “period” or fiscal year. Under zero-based budgeting, every aspect of the budget begins a fiscal year at zero.

Zero-based budgeting takes into account every expense and revenue within the fiscal year without relying on a comparison to the previous fiscal year. The emphasis of zero-based budgeting is not to align the current fiscal year's numbers with those of previous fiscal years. Rather, zero-based budgeting treats every fiscal year as an independent entity. 

Of course, there are pros and cons to everything.

Zero-based budgeting is more time consuming than traditional methods of budgeting. 

But, on the other hand, zero-based budgeting has the ability to lower costs to towns by sidestepping increases from previous fiscal years, according to some research.

Including new ideas and perspectives into the budget conversation, intersected with traditional views and procedures, may produce a new way of thinking in order to control spending.

Due to the current economic situation and ever decreasing revenues, at this time it is critical to have honest discussions regarding controlling spending. 

It is my hope that the Town Council will consider the possibility of priority-based budgeting and/or zero-based budgeting along with what services are essential and what services are nice to have before the budget is actually put together. 

 

 

 

 

 

 

 

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augie42 December 19, 2012 at 11:05 AM
We need the Council to provide the Town Manager with better goals in the budget. Next year we don't have the re-val clouding the revenue base. If we keep raising the mill rate every year, people and businesses will leave. Nice start by Rosanne to get the debate going early. Jan-Feb is when departments assess and provide budget in-put to the TM.
Dannyboy December 19, 2012 at 12:45 PM
2 million a year could be saved if people would wake up and have one police department. The services could be put to use where they should be, in the schools and community based programs. Otherwise, just keep paying more and more taxes because Pfizer is closing down in Groton and this is without question. I am selling my property in Groton. This is soon to be another mini detroit because nobody is listening and times are a changin.
augie42 December 24, 2012 at 02:25 PM
I agree with Dannyboy. Police consolidation should be pushed since a major drop in revenues will likely happen. For example, town and city dispatchers can be consolidated as a trial period for a month. At 7 pm close the city dispatch and transfer it to the town. We can also combine night shift supervision. We need to get smarter about how Groton operates. The golden days of big revenues are dying, so unless we tighten the belt, we will be on a viscous downward spiral of lower revenues and higher taxes.....Can you say California? Scott Aument/RTM dist 6/GATE PAC Chair.
Chris Fabian January 17, 2013 at 10:29 PM
Great article! Have you checked into the International City/County Manager's Association (ICMA) declaration of Priority Based Budgeting as a Leading Practice? Here's their link to resources on PBB: http://icma.org/en/results/management_strategies/leading_practices
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