Newport’s Financial Reporting and Fiscal Practices Task Force told residents that a portion of the city’s accumulated general‑fund deficit stems from repeated double counting of a revenue line and additional deficit spending over several years.
Hal Rosenberg, a task force member, said Article 3 would authorize a general‑obligation borrowing of $1,800,000 “to refund a deficit that we've created because over the past 6, 7 years, we have done 2 things. 1, we've had budgeting issue, where we double counted income to the tune of a million plus dollars. And then there was deficit spending for about another 600,000.”
The task force also presented Article 5: a proposal to increase taxes by up to $220,000 to cover current‑year shortfalls resulting from the same accounting errors. A task force member said those two items address the historical shortfall (Article 3) and the current budget year gap (Article 5).
The group described several steps already taken: NEMRC (the New England Municipal Resource Center) was contracted to review balance sheets and accounting, and the task force said it now has confidence in the balance sheet for fiscal year 2025 as of June 30. Task force and council members said their immediate objective is to end the new fiscal year without deficit spending.
Task force members said council would seek voter permission on Aug. 12 to structure that borrowing so the city can spread repayment over multiple years rather than being required by statute to fully repay certain deficits in one year (a scenario the group said could produce a much larger, immediate tax increase). If voters decline the borrowing, the city said it may face an enforced one‑year payoff under state statute, which task force members said would produce a substantially larger tax hit for homeowners.
Residents pressed the council for safeguards and systemic changes to prevent recurrence. Task force members said they are working with NEMRC and with the Vermont League of Cities and Towns to redesign the chart of accounts, provide clearer reporting and build procedural safeguards. Council members also described planned budget‑process reforms and training for elected officials.