Budget Terms Used at Town Meeting

Budget Terms Used At Town Meeting

• Budget - A financial plan for a given period of time embodying both estimates of proposed expenditures and the proposed means of financing them.
• Fiscal Year - Cities and towns in Massachusetts operate on a fiscal year which begins July 1 and ends June 30. The number of the fiscal year is the calendar year when it ends.
• Levy Limit - Under Proposition 2 1/2 the maximum amount that a community can raise in property taxes is 2.5% more than the maximum it was allowed to raise for the prior fiscal year plus growth revenue.
• New Growth Revenue - The amount of property tax revenue a community can add to its tax levy by taxing new construction. It is computed using the prior year's tax rate.
• Excess Levy Capacity - The difference between a community's maximum tax levy limit and the amount it actually levies in property taxes.
• Free Cash - The amount of surplus revenue over and above uncollected taxes as of July 1 of each year as certified by the State. It is available for appropriation by Town Meeting.
• Overlay - The overlay is the amount raised by the Assessors independently of Town Meeting as permitted by law for the purpose of creating a fund to cover property tax abatements and avoid fractions in the tax rate.
• Reserve Fund - The fund established by the voters at Annual Town Meeting for extraordinary or unforeseen expenditures. Transfers from the Reserve Fund require the approval of the Finance Committee.
• Cherry Sheet - Named for the cherry colored paper on which the Massachusetts Department of Revenue traditionally printed it on, the cherry sheet details the estimated state aid to be received by the Town along with the County and State assessments to be paid.
• Override - A referendum procedure in which a community by popular vote can either increase its levy limit (general override) or collect property taxes in excess of its levy limit to finance specific capital expenditures (debt exclusion or capital outlay exclusion overrides).