Canton Budget Hole, Thanks to Pactiv, Approaches $1 Million
Introduction
Ever since Pactiv Evergreen announced back on March 6, 2023, that it would shutter its paper mill in Canton, town officials have been bracing for the budgetary impact that the closure would cause. The announcement came during last year’s budgeting process, prompting some small cuts at that time, but this fiscal year, the effects of the closure are finally in full view and they’re even worse than imagined.
Financial Challenges
This is probably the toughest year that we will face, based on revenue. Canton has projected some small revenue increases for the coming year, but they don’t nearly compensate for what’s to come. The town is facing a reduction in tax revenue of approximately $1 million for the 2024-25 tax year.
Pactiv will dispute the property tax valuation of its business personal property, adding further uncertainty to the town’s revenue projections. There are also ancillary revenue losses anticipated due to downturns associated with companies that used to do business with the mill.
Cost Increases
In addition to revenue losses, Canton is facing cost increases across various areas. WastePro will increase its rates, health insurance premiums will see a rise, and contributions to the state retirement fund will also go up. The town is also considering a proposed vehicle registration tax to generate additional revenue for road repairs.
Public Hearing
Canton is expected to hold a public hearing for the budget, although the date could change. Despite the challenges, the town does have a $4 million unrestricted direct allocation from the General Assembly to help fund continuing operations. However, without additional economic development, once this reserve is depleted, the town may face even greater financial difficulties.
Conclusion
Despite the uncertainties surrounding the budget, Canton officials are working to address the financial challenges posed by the closure of the Pactiv paper mill. With tough decisions ahead and a need for creative solutions, the town is grappling with how to maintain services and support its community in the face of significant revenue losses.
