The preparation of the Clinton budget begins barely a few months after the previous budget is implemented. A budget is a plan based on the relevant information available at the time of preparation with input from historical trends and discussion of needs from end users.
At the end of the year there is either a surplus or a deficit on various line items. Deficits must be funded from the town’s reserves. Surpluses are factored in to the new budget in various ways. Luckily, Clinton budgets rarely see deficits and surpluses are well within the two- to three percent considered prudent by most business managers.
Historically, the areas that have had budget surpluses in Clinton are personnel, benefits, and utilities, some of the largest lines. Personnel may choose to retire at any point in the year and are usually replaced at a lower salary grade than the retiree. Benefit claims assumptions are reviewed and updated by contract, and the district is always looking out for cost-saving measures when it comes to utilities.
By charter, the proposed budget “shall include an estimate of available cash surplus or deficit at the end of the current fiscal year.” The Board of Finance uses anticipated surpluses the following ways: 1) It allocates a portion as a revenue line item to the next year’s budget. This is a source of spending that is not a taxpayer burden. 2) It may appropriate a sum for capital improvements for the next fiscal year. For example, if a department has capital needs of $400,000, anticipated surplus may be used to purchase some of those needs, thereby reducing the capital request in the next budget; and/or 3) it will evaluate the undesignated fund balance.
Reasonable budget surpluses are not a problem; they are the result of responsible budgets and management.
Published March 25, 2015 – Zip06