By CHELSEY POLLOCK
Union Leader Correspondent
DERRY -- The town administrator has proposed no increase to the tax rate for next year in a $35.6 million budget proposal that would cut two firefighters and one police officer position.
With increasing health insurance and retirement costs coupled with diminished town revenues, Anderson said town staff faced a $1.2 million budget hole to maintain the current tax rate.
“With so much having to come out of this budget to keep it level, the department heads did a phenomenal job putting together their budgets,” said Anderson on Friday. “They all struggled with how do we get there.”
The $35.6 million town services appropriation for fiscal year 2012 anticipates an increase of $308,000 in retirement costs, up 13.4 percent over the current year, according to the budget document. Health insurance is also expected to cost the town $236,000 more than in the current year, an increase of 7 percent.
Anderson said the town is expecting to bring in about $1.2 million less in interest revenue in 2012 than this year and about $500,000 less from motor vehicle registrations.
To help cover those losses, Anderson has called for $212,000 to be pulled from the unrestricted fund balance, with $153,000 for debt service related to the Route 28 TIF bond and $59,000 to help offset the overall budget.
While three full-time positions will be reduced from the budget, Anderson said there will be no layoffs.
The sergeant position to be cut from the police budget is already vacant and the firefighter positions are empty after retirements this year, he said.
After the retirement of the town’s assistant cable facility coordinator, the position has already been adjusted to part time, said Anderson. That change is reflected in his budget proposal.
This budget would mark the third year in a row that councilors have authorized no increases to the tax rate. But Anderson said it won’t be so easy to do that again.
“I think this is the last opportunity to do this,” said Anderson. “Hopefully a combination of things will get us to a better place next year, but if everything stays the same as it is today and interest rates don’t move out of the cellar, we’ll be looking at some signifi cant layoffs next year.”
The Council will begin budget deliberations on Thursday, with consideration of several departments including police, planning, cable and the town clerk.
Anderson said he hopes to have a final budget approved by the Town Council by May 17.