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Avon begins 2027 budget process, weighs local tax options as state distributions change
Summary
Town staff presented a three-year sustainability analysis and a proposed budget calendar, recommended bolstering the rainy-day fund and pacing police hires after a failed levy appeal, and outlined choices for replacing state LIT distributions — including a potential town 38¢ LIT or opting into a countywide rate.
Presenter opened the July work session by framing the meeting as the start of the 2027 budget process and distributing a comprehensive sustainability analysis that will guide spending over the next three years. "This is kind of the start of the 2027 budget," the Presenter said, urging councilors to review the packet and noting it contains multi-year expense and revenue projections.
Why it matters: the analysis and schedule set the timetable for department form-one submissions and public hearings and frame decisions on staffing, capital projects and reserves. Presenter highlighted that the town’s assessed value has grown for 10 straight years and cited lower recent debt costs (4.34% in 2012 vs. 3.115% in 2025). Staff recommended continuing to build the rainy-day fund toward a $2,000,000 target and suggested a $300,000 transfer this year to accelerate that goal.
Staff also reviewed the budget calendar: staff budget day July 28; department drafts due Aug. 7; temporary budget submitted to the gateway and a DLGF meeting on Aug. 10; Greg from Financial Solutions Group will present Aug. 13; public hearing is scheduled for Sept. 24 with adoption targeted for Oct. 8.
On revenues, Presenter reminded the council that three years of special distributions of local income tax (LIT) have been added to fund balance rather than spent. Presenter said those special distributions have materially raised the town’s fund balance and will affect public perceptions of reserve growth.
The council also discussed how to replace money that could be lost under the new state LIT configuration slated for 2029 (distributions and formulas are changing). Presenter said Avon would need to pass roughly a 38¢ local-option LIT to replace an estimated $5 million in revenue, but towns may also opt into a countywide rate. "It could be both," Presenter said, noting the county’s approach—and whether it chooses to pass a single countywide rate—will shape Avon’s options.
Following a failed 2026 levy appeal (a revenue shortfall staff estimated at about $1 million), Financial Solutions Group advised the town to leave the 2026 budget unchanged and hire two of three planned police officers in the second half of 2026 and the third in 2027, if recruitment and finances allow. Presenter said underspending in 2026 could create room to transfer money to reserves.
What’s next: staff will circulate Greg’s sustainability highlights at the Aug. 13 meeting, complete form-one submissions in August and bring revenue assumptions and draft appropriations to council sessions this fall. County-level "must" meetings about LIT and a county letter requesting financial data prompted councilors to ask for clearer county engagement and broader town representation at those meetings.
Sources: Council discussion and staff presentations at the July 9, 2026 work session.
