Op-Ed: Budget Surplus Used to Reduce Taxes

[Todd Lavieri is chair of the New Canaan Board of Finance.]

The Town of New Canaan Board of Finance completed the budget process earlier this month for Fiscal Year 2026 that begins next week on July 1^st. For Fiscal Year 2025 that ends on June 30^th, we have some good news. Our budget surplus is forecasted to come in at $8.0 million –more than 50% higher than expected. The town is expected to spend approximately $800,000 less than budgeted while revenues came in $7.2 million higher. We were expecting a $4-5 million surplus when we budgeted a year ago.

By delivering a budget surplus of $8.0 million this year, we are able to return $5.75 million of that back to the taxpayers by reducing the amount required to be raised by taxes, with the remaining $2.25 million balance of the surplus being assigned to our ‘rainy day’ general fund. Over the prior 8 years, we have delivered surpluses each year and used them to reduce the amount raised by taxes. This year’s surplus is one of our biggest.

The average increase in the amount raised by taxation over the past 8 years, including next year’s budget, is 2.3%, a very strong accomplishment by our Town and Boards over this period, especially with inflation headwinds recently. That average increase compares favorably with surrounding towns. During the budget process, we were able to reduce operating expenses by more than $2 million and capital requests by more than $6 million, while still meeting the needs of our schools, public safety, public works, and many other town-related services. Lastly, we completed our Police Department renovation 6 months ahead of schedule and more than $900,000 under budget. Congratulations to everyone involved. The $900,000 will be applied to other capital expenses that have been budgeted, helping us offset future capital costs.

The amount to be raised from taxation for fiscal year 2026 will be $164.0 million, a 3.76% increase from Fiscal Year 2025.

Setting the mill rate marks the final step of the fiscal year 2026 Budget process that began in the late fall of 2024. The budget process, combined with the $5.75 million surplus drawdown, resulted in a mill rate of 16.691. Maintaining healthy reserves and a stable mill rate remain priorities of the Board of Finance. As our overall budget increases, we do need to add to our reserves and maintain a general fund balance of 10-15% of our total budget to meet our stated budget guidelines.

I would like to thank our Board of Selectmen, Board of Finance, our Town Council, our New Canaan school administration, our Board of Education, our Department leaders, and Town employees, for their hard work and guidance.