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Avon begins 2027 budget process and weighs countywide tax options as LIT changes loom
Summary
Avon staff launched the 2027 budget process with a multi-year sustainability analysis, proposed a $300,000 transfer toward a larger rainy day fund, and urged councilors to weigh whether Avon should set its own local income tax rate or opt into a potential countywide rate under pending implementation rules.
Staff opened the meeting on July 9 by distributing a sustainability analysis to councilors as the town begins the 2027 budget process. The analysis, staff said, projects three years of revenues and expenses and recommends caution on new positions and salary increases; Financial Solutions Group advised growing the town's rainy day balance and proposed a one-time transfer of $300,000 to that fund.
Why it matters: State law changes are altering how local income tax (LIT/LIT-like distributions) will be collected and distributed in coming years. Staff told the council that Avon has received special LIT distributions in prior years and has added most of those receipts to fund balance. For this year, staff cited special distributions roughly in the amounts of $517,000 (general fund), $35,000 (public-safety-specific distribution), and $167,000 (EDIT) and said those receipts have materially increased Avon’s fund balance.
Councilors prioritized fiscal sustainability. Staff emphasized that the town’s assessed value—which drives property tax revenue—has grown about 5.7% in the latest cycle, and that the sustainability analysis builds multi-year growth rates into estimates rather than budgeting only for the immediate year. Financial advisers urged restraint on salary and new positions while preserving the town’s ability to transfer funds to a larger reserve.
Countywide LIT discussion: Staff briefed the council on intergovernmental conversations called “MUST” meetings intended to coordinate town and county responses to a future countywide LIT option. The county asked towns for a set of financial information on short notice, which staff and some councilors said felt premature; staff recommended re-evaluating whether staff or elected officials should attend the county sessions. Staff explained that Avon could either opt into a county rate or adopt its own rate locally—both are possible under the pending framework—and that, according to town analysis, Avon would need an approximately 38¢ rate (per $100 of assessed value) to replace an estimated $5 million of revenue in one scenario presented to council (figures and modeling are staff-provided and not final).
Public-safety and fire distributions: Councilors and staff noted the legislative change separates certain public-safety distributions (fire) from other town-level distributions and discussed how separate fire/public-safety components may affect the town’s choices and taxpayer impacts.
Next steps: Staff will bring sustainability and fund-level budget estimates to upcoming August meetings (including consultant Greg’s August 13 presentation) and advised councilors to review the packet. The town expects more intergovernmental detail before any final decision on county participation or a town rate; staff said any Avon decision will be taken by the council with public notice well before a 2028–2029 implementation date.
