After four months of effort by the Budget and Financial Review Board, the Town Council will be discussing and acting on a proposed budget for FY2027, beginning on July 1, 2026. Some thoughts and important facts:
- The budget process, based on the Town Charter, is forwarded by the Town Manager by March 1, 2026.
- We received the full budget details soon after that. After careful examination of the budget, it was determined that the budget included a structural deficit of $1.2M.
The definition of a structural deficit is when Revenue – Expenditures < 0. Simply put, the budget has been planned with a deficit without spending any funds. For example, imagine if your household budget in January planned that you were going to spend $10k more than your income, you will either have to charge the different to credit cards, re-mortgage your home, or borrow money from other sources.
Unplanned expenses during the year are not the issue here. If your car needs a set of tires, then you may charge that unanticipated expense to your credit card. However, no household, business or government should plan on spending more than they receive.
How did the BFRB proceed to analyze and compile a fiscally-responsible recommendation for the taxpayers of Smithfield? We went through entire account line items. I remember the first meeting where we reviewed every department line item for Office Supplies and “flat lined” those accounts (no increase). Then, …
- Our Chair, provided an analysis to the Board members of every department line item comparing three items:
- –> Total actual expenditure (FY2025),
- –> The six-month (through 12/31/25) actual expenditure extrapolated to an annual number (multiplied two),
- –> To the Town Manager’s recommendation.
Thanks to my colleagues on the BFRB for their efforts during over 20 hours of meetings, not including all the efforts of spreadsheets, analysis and reporting budget information.
This process was thoughtful, quantitative, and objective. Not to mention tedious to the hundreds of line items in the budget. The goal was to create a sustainable, fiscally prudent budget for the taxpayers.
Final thought … An involved electorate is necessary to maintain quality government and as a “check and balance” over government leaders.
In my many conversations around town, I am continually asking people to a) attend meetings and b) if you have a question or concern, please step up to the podium during Public Comment and articulate those concerns to the public body. It is YOUR government, not the leaders.
More to come on this subject soon.
Thanks for listening!
