I'd like to raise four troubling budgeting issues facing Milton.
1. Restricting the use of realty transfer tax – There is a proposal to separate realty transfer tax funds from the general budget by placing the funds into a restricted account, thereby excluding them from general fund use. This separation will restrict the funds to specific debt services and selective capital investments as well as impact our general fund budget by hundreds of thousands of dollars. Moreover, it will remove budget flexibility. The 2025 budget is placing the estimated $499,000 in transfer tax revenue for 2024-25 – as well as all future realty transfer tax revenue – into a restricted fund. This fund's likely purpose is to build up reserves for future infrastructure needs directly related to recent annexations. For example, page 12 of the PFM consultant's report states that the real estate transfer tax will be used as a funding mechanism for new municipal buildings. My calculations suggest that transfer tax revenue could increase by hundreds of thousands of dollars in the coming years. Up to 600 homes are scheduled to be built in 2025 alone, yet the 2025 budget only budgets for transfer tax revenue from 74. One of our biggest years for realty transfer revenue could be 2025, and all that revenue will be locked into the restricted account.
2. Why the urgent need for a 34% property tax increase? Contrary to some beliefs, this increase is not due to delays or mismanagement by prior administrations, but to a growth-at-any-cost agenda by some in leadership. This massive property tax hike and future debt related to future bond sales are due to the recent surge in annexations. These annexations have highlighted the town's inadequate infrastructure necessary to support this growth. The subtraction of hundreds of thousands of dollars from general fund use is driving the need for a large tax increase. This issue was apparent during the annexations, but few wanted to acknowledge it and some knowingly avoided addressing the issue, kicking the can down the road.
3. Potential new bond debt – The town is facing the possibility of incurring up to $30 million in new bond debt. The PFM report describes the real estate transfer tax as a funding mechanism for new municipal land and buildings! This need for new municipal land and buildings will precipitate the need for borrowing huge sums of money to fund capital improvements and the tax increase to cover general funding costs due to the restricting of transfer tax funds.
4. The growth-at-any-cost mindset – Pursuing growth at any cost has contributed to our financial problems. This approach has led to the budgeting crisis. Those who pushed for the rapid growth through annexations should be held accountable for the lack of foresight and transparency. Instead of the developers and builders, who are generating all the new growth without paying for all the required infrastructure upgrades, the costs of shouldering the burden are being placed on taxpayers. Why aren't builders paying for needed infrastructure upgrades by the town imposing more responsible impact fees?
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