Paris budget sees $236k shortfall

PARIS – The Paris Budget Committee on April 19 voted to use the town's infrastructure reserve fund to cover a recently discovered $236,000 budget shortfall.

According to Town Manager Phil Tarr, when the Budget Committee began its deliberations in early March, it set a goal to not exceed a $1 increase on the town's mil rate.

Unfortunately, this move was made before the assessor had determined the tax rate for the coming year.

The budget that the committee designed did not take into account two tax exemption programs, including the homestead exemption, where the state pays part of property taxes, and a business equipment tax exemption (BETE), which gives exemptions to businesses that invest in new equipment. 

The budget also did not take into account a Tax Increment Financing (TIF) district or the overlay.

"We went ahead and worked with the Budget Committee and created a budget that maxed the tax rate out at a little bit less than a dollar ... but it left these other things undone," said Tarr.

The exemptions, TIF and overlay have combined into a budget shortfall of around $236,500.

Tarr says that, after discovering the error, he and other town office employees worked hard to find a way around the dilemma.

According to Tarr, the town found money to fund the gap in a number of the town's accounts, including the $257,000 infrastructure account – originally intended to be used on sidewalks and roads –  and a $40,000 account containing funds from an insurance settlement from the old fire station.

The Budget Committee decided to apply the entire infrastructure reserve, succeeding in overcoming the budget gap without more tax increases.

The move, however, has nearly tapped out the infrastructure reserve.

"We have to be cognizant of the fact that we use this reserve, and that will have to be seriously considered next year when we do a budget, either through additional taxes or cuts or a combination of both," said Tarr.