How to Understand a Town Budget

Important Terms:

Revenue= Money earned                         
Expenses= Money spent                           
Deficit= Amount of money spent that is more than the  budget
Surplus= Money that was budgeted but not spent 

The Four Main Columns in the Town Budget

These columns give us important information about how our money was spent, how much we spent in each area, if we were under or over budget on an item.  Whenever you see a difference between what was budgeted and what was actually spent, this is an opportunity to ask questions.  Why did that change happen? What does that change mean for town services?  What does it mean for taxes?  What does it mean for town projects? Should we continue to do this project if we don’t spend any money on it or if we spend too much money on it?

Budget

  • This is what was budgeted to be spent for the year that just passed. 
  •  
  • This number is what residents approved to be spent by voting yes or no on the budget on the ballot vote in March

Actual

This is what the town actually spent on each item in the budget. This amount spent may be different from what was budgeted.  These differences are sometimes important–look for these when you read the budget. 

 % of Budget  

  • If this number is less than 100, then the amount spent was LESS than budgeted.  If it is over 100, then it was MORE than budgeted. 
  •  
  • Example: “150” means that the amount spent is 50% higher than originally budgeted.

2022 BUDGET 

  • This is what the Selectboard is proposing to spend in the upcoming year.  Look for big changes from last year’s budget, as well as the actual from last year. 
  •  
  • You will be voting to approve or reject this budget in March

Example from 2022 Budget

Account

Budget

Actual

% of Budget

2022 BUDGET
01-010.01 Recording Fees $8,000 $8,856 111% $8,000
01-010.02 Copy\Fax Fees $1,400 $1,952 139% $1,500
01-010.03 Title Search $200 $271 136% $200

This example is from the Non-Tax Revenue section of the budget. 

Let’s look at the first line: “Recording Fees.” The actual amount brought in was $856 more than was budgeted ($8856-$8000) which is 11% more than budgeted.  Next year’s budget is the same as the budgeted amount for 2021 ($8000).

Line two:  Fees were $552 higher than budgeted, a 39% increase. There’s an anticipated budgeted increase in copy/fax fees of $100 for 2022.  

How to figure out what the town will charge in taxes:

We pay property tax–some of that goes to our schools, and the rest goes to our town.

  • $2,528,791 represents what was billed by the Treasurer to property owners
  • $2,122,494 represents taxes collected on time (by November 20th)
  • Delinquent taxes are late taxes that are paid after November 21.  You can look at the “Statement of Delinquent Taxes” in the Town Report to get a sense of how many delinquent taxes are unpaid from previous years, as well as what was collected.

 

Account Budget Actual % of Budget
01-010.00 2021 Property taxes $2,528,791 +$2,122,494 84%
01-010.06 Delinquent Taxes Collected 0 +$201,183 100%
01-709.00 2021 School Taxes Paid 0 -$937,856 100%
01-710.00 State Education Fund Pymt 0 -$858,513 100%
       
Net Total Taxes Collected   =$527,308  

How to understand the math:

  • “Property Taxes” plus “Delinquent taxes” = what we collectively paid towards both our school and town taxes. 
  • School Taxes Paid and State Education Fund Payment = what we paid out towards the school fund.  
  • Net Total Taxes are what we have left from our Property and Delinquent taxes after we paid the school taxes.  This is the amount we spend on running our town.

How to understand the final page of the budget:

  • If we didn’t spend all of what we budgeted in the previous year, it goes into a “surplus” section.  This year, we have $11,386 in surplus.
  • We also have revenues that are not from taxes–they might be fees or grants, or unspent highway funds, etc.  This year, we have $155,930 in non-tax revenue.
  • Any money that is in the Highway Fund has to stay in the Highway Fund
    • There are also rules about the revenue we get from federal and state grants: how those are allowed to be spent as well as how they are accounted for as surplus
  • The costs to run the town, as budgeted for 2022 are projected to be: $586,208
  • If we take what we will owe to run the town ($586,208) and subtract non-tax revenue ($155,930), the 2021 surplus ($11,386), the remainder ($418,892) is what the town will have to raise through taxes.

 

2021 SURPLUS        
GEN FUND SURPLUS $16,274   2022 NON TAX REVENUE
ADMIN DEFECIT -$5296   GEN FUND $49,070
SOLID WASTE SURPLUS $400   REC REV $3,500
TOWN HALL DEFECIT -$188   HIGHWAY REV $94,860
OTHER DEFECIT -$339   LISTER REV $8,400
REC DEPT SURPLUS $535   MINIS REV $100
ACTUAL 2021 SURPLUS $11,386   2022 Non tax $155,930
         
         
         
         
2022 BUDGET     2022 BUDGET $586,208
ADMINISTRATION $140,755   2022 NON TAX -$155,930
SOLID WASTE $537   2021 SURPLUS -$11,386
TOWN HALL $17,950   RAISED BY TAX $418,892
APPROPRIATIONS $48,542      
OTHER $42,584      
SERVICES $10,550      
REC DEPT EXPENSE $3,500      
HIGHWAY EXPENSE $306,040      
LISTER EXPENSE $8,000      
AUDIT FUND EXPENSE $7,750      
TOTAL EXPENSE $586,208      

Now you’re ready to go!  Go to the Town Budget Page and have fun exploring the Town Budget!