Local News
November 9, 2016

Rutland Mayor lays budget increase at board’s feet

By Adam Federman, VTDigger.org
RUTLAND — The onus is on the Board of Aldermen to cut municipal spending in order to avoid a tax rate increase, Mayor Chris Louras told the Board in a letter Tuesday, Nov. 1, accompanying his fiscal 2018 budget proposal.
The Board’s decision in July to effectively double the city’s annual contribution to the pension fund for city employees, along with a steep rise in health insurance premiums and workers’ compensation costs, has led to a more than 10 percent increase in the budget for the next fiscal year, according to Louras.
In July the Board passed a resolution requesting that the city budget pension be funded at $1.35 million annually for the next 45 or more years to make up for a projected shortfall.
“Since they prioritized that expenditure, I’ll let them prioritize what to cut,” the mayor said.
Board President William Notte said the pension deficit committee had to address not only the projected deficit but also the fact that new city employees are now plugged into the state municipal pension system and therefore not contributing to the fund.
“It really was a double-edged sword,” Notte said. The city currently has 151 full-time employees.
Notte said the Board reasoned that the city could gain leverage in talks with unions by making the first overture and upping its contribution to the fund. Last year the city’s contribution to the fund was $645,000. Notte said he was pleased the mayor had included the pension increase. “The pension deficit committee really looked at every possible funding source idea before approval of the resolution,” he said. “I don’t think anyone was in a celebratory mood about it, but sound fiscal policy is something that needed to be done.”
The mayor’s logic regarding the pension fund was the mirror opposite, and he argued that there be no requirement for increased contributions. According to the mayor, the notion that unions would follow the city’s lead and contribute more themselves is misguided and irresponsible. “It took the most effective tool that we have out of the toolbox in negotiating pensions,” the mayor said.
Next year’s proposed budget is just under $21.37 million. For this year it was approved at $19.65 million, and the municipal tax rate was $1.517 per $100 of assessed property value.
Health care premiums have gone up more than 12 percent and workers’ compensation by $187,277, which Louras said is due in part to the increased pension expenditures. Over the last three years the city budget has remained relatively flat; municipal tax rates have declined slightly.

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