For the past two years, the Finance Committee in Concord has been hard at work on a fresh approach to its 5 year projection of future taxes.
From its initial engagement with the Comprehensive Long Range Plan (CLRP) process, the Finance Committee has been carefully working to understand how the community can embrace sustainability in relationship to its financial affairs, in a way which permits the Town, to the maximum degree possible, to achieve its non-financial aspirations. Over the course of two years, the FinCom has arrived at a more expansive understanding of its 5 year tax estimating practices. The new approach now includes guidance in addition to estimates, offering a preferred rate of tax growth, which we are calling the Sustainable Growth Rate (SGR) of taxation.
The SGR is intended to help shape budgetary decisions which have a multi-year future impact, such as collective bargaining agreements, service contracts, and equipment leases. The Finance Committee intends to annually review and adjust the 5 year forward sustainable rate. This will allow the Town to be responsive to changes in inflation and the cost of living. At times of even modest inflationary pressure, we anticipate that the SGR guidance will exceed the unresponsive 2.5% dictated by Proposition 2 ½.
This year, for the first time, the Committee published the Sustainable Growth Rate in its annual budget dialog with both the Town and Schools. In the current environment of low borrowing rates and low inflation, the FinCom recommends a five year planned tax horizon of 2.16% annually.
To hear about the Finance Committee’s introduction and commitment to an annual publication of a Sustainable Growth Rate and offer your feedback, please mark your calendar to attend a Public Forum for a presentation and time for citizen comments. November 7, 7:00PM, Town House Hearing Room. We look forward to your attendance and feedback.