The Finance Committee argued that the town should put funds away for a rainy day.
The Ludlow tax rate might increase by one percent, according to the Finance Committee.LUDLOW - The Finance Committee is predicting a tax rate increase of one percent this year.
When selectmen at the Oct. 1 Town Meeting wanted to transfer $70,000 from the town’s stabilization account to offset the tax rate, the Finance Committee was opposed.
Finance Committee member Maureen “Kim” Downing said that $70,000 would not offset a tax increase in a significant way.
“It is better to save this money for a rainy day,” she said.
Selectman Aaron Saunders argued that the funds were needed to reduce the tax rate.
“We had a difficult last year,” he said.
Last year the Board of Assessors announced a fiscal 2012 residential tax rate of $16.98 per $1,000 of assessed valuation, an increase of 8.2 percent over the prior rate of $15.70 per $1,000 of assessed valuation.
The fiscal 2012 tax rate meant that taxes on the average $212,000 home in town increased from $232 from $3,382 last year to $3,613 this year.
By transferring $70,000 from the stabilization account to offset this year’s tax rate, the savings would only be $10 on the average tax bill on a $200,000 house, Downing said.
She argued that if the town saves the money and adds to it, in two years it would mean a significant savings on the tax rate.
“We need to level out the highs and lows” of the budget, Downing said.
Town Meeting member Joseph Santos said he agreed with Downing that the town should put money aside for a rain day.
“We should put some money aside and keep it there,” he said. “We need to use money frugally.”
A motion to transfer the $70,000 to offset the tax rate was defeated at the Town Meeting by a show of hands.