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Berlin council weighs 1.25-cent tax increase as budget gap, parking fund split approved for introduction
Summary
Council members approved placing 10% of projected room-tax revenue into a new parking capital fund and were told the general fund faces roughly a $411,000 deficit; staff indicated the tax rate will be introduced at one and a quarter cents to help close the gap.
The Berlin Town Council continued a budget work session Wednesday as staff laid out revenue projections and options to close a roughly $411,000 general-fund shortfall.
Natalie, presenting the general-fund revenue draft, said the town’s primary revenue remains real property taxes and that current-rate projections (0.8275) put that line at about $328,000, “rounded to the nearest thousands for the short conversation going forward” as revenues showed a 6.7% increase. She also described room-tax projections that average about $103,000 over three years but recommended a conservative working number near $90,000 and proposed directing any amount above that to a separate parking capital line.
Councilmembers debated two ways to structure the parking allocation: treat $90,000 as a base and place only the ‘excess’ into a parking fund, or set a fixed percentage of total room-tax receipts to be reserved. By consensus for the resolution language to be drafted for next week’s meeting, the council settled on a 90/10 approach (10% to parking capital), which staff said will be reflected in the upcoming resolution.
The budget presentation covered other revenue assumptions — a modest reduction in public-utility tax receipts, a projected increase in state income tax receipts to about $700,000, and carryforward project funding for the town-hall renovation and other capital items — but the council repeatedly returned to the deficit.
Faced with the shortfall and no contingency in the general fund, the mayor’s office flagged a modest property-tax increase as one of several options to help balance the budget. Staff said the measure they intend to introduce next week is a “penny and a quarter of a penny,” which they estimated would raise approximately $79,000. Officials said the rate introduction allows time for additional adjustments before final adoption; the tax-rate public hearing and the budget’s first reading were scheduled in subsequent weeks.
Councilmembers also discussed personnel costs, with staff recommending a 2.5% step increase plus a 2% cost-of-living adjustment for employees while some members asked staff to model slightly larger COLA/step combinations pending final insurance-cost numbers.
The council asked staff for more granular department-level overtime breakdowns and signaled that requests from external partners — most notably the Berlin Fire Company’s funding request totaling roughly $1.4 million for fire and EMS — will be considered against the limited general-fund capacity.
The council will formally introduce the tax rate at the next meeting, and staff said budget action will follow the public-notice and hearing schedule as required.
