SEABROOK — Town officials reviewed a financial report from Town Manager Bill Manzi on Monday to commence the 2019 budget process and clarify underlying fiscal issues.
The report examined the factors that determine the town’s tax rate, with the data showing residents where tax dollars originate and how they are spent. In addition, the report shows trends to assist selectmen and the Budget Committee, Manzi said.
The amount raised through taxation, measured from 2014 to 2017, has grown by nearly $2 million — less than 2 percent, Manzi said.
“That makes it difficult to make the case that Seabrook has a spending problem,” Manzi said in the report.
The report also recognized the impact of a drop in NextEra tax revenue and how that decrease has altered the percentages paid by the different classes of taxpayers.
In 2016, for the first time since Seabrook Station opened, residential taxpayers paid more in taxes than NextEra — the company that owns the nuclear power plant. That trend has continued.
The NextEra tax levy was $12.8 million, or 34.8 percent in 2016, and residential taxpayers contributed nearly $16.1 million, or 43.5 percent.
In 2017, NextEra paid $12.3 million in taxes, or 31.3 percent, while residential taxpayers paid $17.8 million, or 45.1 percent, according to the financial report.
An additional trend highlighted the importance of commercial and industrial growth, Manzi noted. The town has grown in the last four years by more than $2 million, bringing that number to over $9 million annually, the report said.
“I project that this category will likely pass NextEra as a tax contributor in the next three to five years and shows that the idea that Seabrook could do without this tax class is misplaced,” Manzi said.
These new growth numbers show $2 million in additional tax revenues in the last four years and that the “new” commercial growth has been financially vital to the town, Manzi added. The four-year increase in the total tax levy for the town is $322,711, according to the report, an annual increase of less than half of 1 percent.
The town manager also projected that the school portion will pass the town portion in the next five years.
The drop in NextEra payments was also reflected in this determination. Manzi noted this depicts further evidence that the financial issues facing the town have a lot less to do with a “spending problem” and more to do with a “redistribution” of the tax burden.
Water and sewer funds, which are scheduled to be discussed at the next selectmen meeting May 21, equal 8.2 percent of the operating town budget. Manzi said this is a “major issue” facing the town in the future.
Employee health care costs, which have been stable for the last four years, also contribute to a major percentage of the operating budget at 15 percent.
Town officials said they will explore additional options and “reach out of their comfort zone.” Health care costs and water and sewer make up 23 percent of the operating budget.
“These two items are crowding out other necessary spending,” Manzi said. “If the trajectory continues, the strain will only become more substantial.”
Selectman Aboul Khan noted the voter reaction in the March election when the majority of warrant article spending was voted down. Town officials will continue to examine the financial report and prepare for drafting the 2019 budget.
Amanda Getchell covers Newburyport and Seabrook. Follow her on Twitter @ajgetch.