BY DARRELL HALEN
Salem selectmen voted to withdraw $750,000 from the town’s unreserved fund balance in order to cut the municipal tax increase of the 2007 property tax rate from 6 percent to 3 percent.
But during the board’s special meeting on Wednesday, Oct. 24, a Budget Committee member questioned if selectmen came up with a plan for doing so out of public view, violating the state’s Right to Know Law.
Everett McBride, the board’s chairman, said selectmen were resetting the town’s portion of the 2007 tax rate to keep a promise to residents that an increase would be no more than 3 percent.
“The decision to use more of the fund balance is fiscally prudent and the town’s financial situation is still very solid,” McBride said.
By tapping into the reserve fund, selectmen dropped a proposed increase in the town’s tax rate by 16 cents to $4.48 per $1,000 of assessed valuation – a difference of roughly $57 for a $350,000 home.
By pulling out $750,000, the balance will be $3,828,109 – roughly 4.9 percent of total town appropriations. Because selectmen have a policy to have at least 6 percent in the fund when it is finalized by auditors, Town Manager Jonathan Sistare has frozen spending except for payroll and emergencies to reach the 6 percent mark for the audit.
One of the factors cited by some selectmen and town employees for the initial increase is the veterans tax credit, which was raised to $500 in 2005 and will cost the town $755,000 in revenue this year.
Selectman Pat Hargreaves said it was unfair to put most of the blame on the veterans credit.
“It’s not only the veterans (credit), it’s the budget itself that was inflated,” he said.
Budget Committee member Stephen Campbell characterized the selectmen’s actions as a Band-Aid approach. Permanent cuts need to be made to the 2008 budget, he said.
“You’re taking care of (the increase) in a very temporary way and that’s good because people have to pay this tax bill, but we’ve created for ourselves a long-term problem,” he said.
McBride said selectmen want to meet the needs of the town and keep tax impacts to reasonable levels.
“There’s at least a million dollars in cuts you’re not going to see because they’re not going to get to you,” said McBride, referring to warrant articles he is going to vote against in order to reduce spending.
Campbell then questioned if selectmen had settled on their plan following a public board meeting two nights earlier on Monday, Oct. 22.
“My concern was, when was this discussed? Where was this discussed?” He called their alleged actions a disservice to the public.
After the meeting ended, he said, “It’s the law and it applies to everyone, and I’m sick and tired of them thumbing their nose at it.”
McBride said that before selectmen went upstairs in town hall for a nonpublic session on a personnel issue following the public portion of their Monday, Oct. 22 meeting, Selectman Beth Roth asked him what could be done about the 6 percent tax increase.
McBride said he put the question to Sistare, who said he would check.
McBride didn’t know if the tax rate could be reset. When Sistare told him the next day it could be done, McBride said, he had him schedule the special meeting and notify members.