By Elisabeth Strillacci

SPENCER  — The town of Spencer, like many small communities across Rowan, is looking at a budget proposal of about $5.1 million that includes a nominal increase in property taxes but the overall budget is still lower than this year’s budget.

That increase will represent, on average, an additional $95 per year (for a homeowner of a $275,000 home), something that Town Manager Peter Franzese hopes residents will see as reasonable.

The proposed budget for FY2026 totals $5,150,042 with $4,976,050 in the general fund, $155,592 in the Powell Bill fund, and $18,400 in the capital reserve and replacement fund. The recommended property tax rate is 62.5 cents per $100 of valuation, an increase from the current rate of 60.5 cents. That total amount is down 13 percent from the current year’s budget, with about a 7 percent reduction in the general fund, Franzese explained.

He added that the decrease in spending was driven by modest growth in assessed property values and nearly flat growth in sales tax, two key municipal revenue sources.

In the last several years, the town has been the beneficiary of a booming economy that has seen an influx of cash from increased sales tax revenues, along with $1 million in ARPA funds that the town pushed through the budget over three years, $500,000 the first year and $250,000 the next two years. But the town, instead of offsetting taxes that would then have to be raised to make up the lost revenue this year, put those funds toward other items, such as new equipment and a down payment on a new fire truck.

“We have a lot of development on the books, a lot that is coming down the pike, but while we wait for that to come to fruition, we know it’s going to be tight for a while,” said Franzese. Currently, the assessed value of property in the town is about $300 million, and Franzese said the building that has either been started or is coming could bring a 5- to 10-percent increase in that assessed value in the coming years, but it can’t be counted yet.

Franzese expressed gratitude for the work of staff on “what is truly a heavy lift,” noting that back in April, he talked with the board about the fact that the town was facing “about a million-dollar gap” for the coming year, and that there would be changes needed in spending. In recent years, he said the town has has better than expected results in sales tax revenues but there was still a need to use the fund balance to pay to get the budget balanced. There has also been an infusion of federal dollars that are no longer available.

“We’ve been on a rocket ship, and it’s been exciting, but we don’t want to run out of fuel,” he said. “While significant grant reimbursements received in the current fiscal year is positive for our available fund balance, we still need to work on less reliance on fund balance as a budget strategy to help grow our reserves over time. The modest application of some available fund balance in next year’s budget in advance of projected significant assessed value growth will keep us moving in that direction.”

The overall budget takes a pause on several items, including the position that last year was an intern position for the arts program, reduction in some contract hours, and deferral of some equipment purchases for fire and public works, a freeze of a police patrol position, transitioning a police position that is currently assigned to code enforcement back to patrol, and skipping participation this year in the annual Dragon Boat Festival.

Although the town undertook a classification and compensation study in FY2025, the recommendation is to delay implementation of the study’s results until revenues grow through the expected tax base expansion over the next few years.

“We have invested heavily in staff and capital improvement and gotten on the right track,” added Franzese, “but now we need to right size that to have a more sustainable budget going forward.”

For some on the board, however, a need to remain competitive in salaries for staff in order not only to hire, but to maintain, mean the budget as proposed is concerning.

“There were lots of great ideas brought to the table to help manage a significant deficit in our budget,” said Erin Moody, one of the board members who said she does not think she can vote for it as presented. “We still have work to do to ensure that our tax dollars are used in the most meaningful and appropriate ways. I commend the Spencer town staff for their remarkable efforts that went late into night working on this.

“In this unprecedented labor market, we are struggling to compensate Team Spencer as they deserve and as is indicated regionally, while still trimming the budget to keep costs low for our residents.”

Franzese said he understands that the cuts are stressful, but he still believes “the future for Spencer is bright. Yes, we need to take a pause on some things, but in general, I think we keep doing what we’ve been doing, and understand that growth is coming.”

There will be a public hearing on the proposed budget at the pre-agenda meeting June 5, for anyone from the community to come and voice concerns or support, and Franzese said a budget proposal will be ready for a vote at the board’s regular meeting June 10, but the board can “certainly have additional workshop meetings on June 10 and we can have an additional meeting on another day for a vote if the board so desires.”