OFFICE OF THE TOWN MANAGER
Budget

General Funds

Voters at the April 25, 2006 Financial Town Meeting approved the FY2006-2007 General Fund Budget in the amount of $68,405,793, representing an increase of $4,015,717 over the prior fiscal year. Funding is allocated in the amount of $21,379,407 (31%) for municipal services and $47,026,386 (69%) for school programs.

Appropriations for municipal operating programs and services equal $18,353,986, an increase of $1,236,687. Outlays for annual capital projects amount to $1,501,000 and for debt service for major public improvements, $1,524,421.

The approved budget includes a property tax transfer for school operations amounting to $43,352,497 and representing an increase of $2,619,420 over prior year support. Spending for school-related debt service will require $3,673,889, which is $207,037 less than FY2005-2006.

The chart below displays the FY2006-2007 operating budget by major function.

Municipal Budget return to top

The adopted municipal operating budget amounts to $18,353,986 or $1,236,687 (6.7%) more than the prior year. This increase is primarily driven by contractual and cost-of-living salary adjustments for the 217 full-time and 40-plus part-time employees ($325,657), increased employer retirement contributions ($210,263), and a hike in employee health insurance premiums ($309,463).

Other major costs increases associated with the FY 2006-2007 municipal program include an expansion of recreation programming and parks maintenance initiatives that will add $71,409 in new service costs, a $42,627 increase in the cost of conducting elections scheduled in FY 2006-2007, and a $64,135 increase in the cost of operating the municipal library system.

As shown in the graph below, the cost of public safety services represents the largest municipal program expenditure. In FY2006-2007, expenditures will amount to $6,305,634 consuming 29.5% of the municipal budget. Public Safety includes police and emergency medical services, dispatch, animal control and shelter programs, harbor patrol, and communications.

School Budget return to top

Because funding for school programs and facilities represents four-fifths (80.59 percent) of the local property tax rate need, major emphasis is placed on the review of the School Committee's expenditure budget and revenue requirements.

For the 2006-2007 fiscal year, the School Committee proposed a School Fund of $55,912,230 representing a $3,987,178 or 7.68% increase over the current year School Program of $51,925,055. Property tax support necessary to fund the School Committee's proposed program would amount to $44,330,414 an increase of $3,597,337 or 8.8% over the FY2005-06 appropriation of $40,733,077.

To assess School Department spending needs, the Town administration conducted a trend analysis of specific operating expenditures and examined the accounting cost projections used to prepare the proposed School Budget. Working closely with the School Administration, Town staff recommended the reduction of $391,206 in planned School Fund expenditures and School fund non-property tax revenue enhancements of $586,711. The combined impact of these revisions allowed for a reduction in the needed property tax transfer to the School Fund of $977,917.

The Town Council, with the full support of the School Committee, recommended a property tax transfer of $43,352,497 (an increase of $2,619,420 or 6.43% over the current year appropriation) to support the school operating program in addition to providing $3,673,889 to pay all education-related debt service costs due in FY 2006-2007.

Five Year Budget Trends return to top

Budgeted expenditures for all municipal services, capital projects and debt service have risen an average of $976,540 or 5.13 percent annually over the five-year period FY2001-2002 through FY2006-2007. Annual expenditures for municipal operating programs have increased an average of $897,433 (5.51%) while spending for Town debt service has risen by an average of $74,607 (5.80%). The capital budget has increased by an average of $4,500 or 0.31 percent.

During this period, the local tax appropriation for school programs has risen an average of $2,425,875 (6.31%) annually while debt service for school facilities construction and improvements has decreased by an annual average of $113,972 (-2.94%).

Over this five-year period, the annual growth rate for the total general fund budget has been $3,288,443, representing an average increase of 5.36 percent.

Property Tax return to top

Based on the historical state/local tax structure in Rhode Island, cities and towns must rely on the property tax as the principal revenue source to support municipal and school services. In the adopted FY2006-2007 budget, the required property tax levy amounts to $56,477,248, representing 82.56 percent of all general fund revenues. The property tax allocation for municipal programs is $10,963,463 (19.41%) and $45,513,786 (80.59%) for school services and facilities. The property tax rate for FY2006-2007 is $13.65 per thousand dollars, consisting of $11.00 for school purposes and $2.65 for municipal services.

In an analysis of community property tax burdens (see RIPEC’s FY2006 Property Tax Burdens in Rhode Island), the Rhode Island Public Expenditure Council has reported that South Kingstown’s FY2005-2006 effective tax rate ranked 23rd among the state’s 39 cities and towns. RIPEC reports that the effective property tax on a $350,000 home was $3,823 and the statewide average tax on the same valuation was $3,806.