Preliminary, unofficial numbers indicate that a municipality's non-debt general fund budget expenditure increase from 2016 to 2017 must be less than the sum of the 0.93 percent increase in the Consumer Price Index for the 12 months ending September 30, 2016, plus the community's net new construction percentage during 2015 (up to a maximum 2 percent) in order to qualify for ERP payments in 2018. DOR will officially notify communities of their allowable 2017 budget increase for ERP purposes in late October 2016.  

Based on the above numbers we anticipate municipalities will be permitted to increase their budgets between 0.9% and 2.9%, depending on their new construction level. 

League staff met for a second time with DOR Secretary Rick Chandler and his staff on October 12 to try to convince them to reverse their recent decision on how the Expenditure Restraint Program budget worksheet must be completed. Our efforts did not succeed. DOR remains committed to requiring that all communities completing the ERP budget worksheet must include the community's entire property tax levy in line one of the worksheet, relating to general fund expenditures, regardless of whether part of the levy might be used in other funds the community has created.  

DOR staff emphasized that communities that did not complete the 2016 worksheet in the manner now required have been invited to redo their worksheet and also have the opportunity to make adjustments to the prior year's worksheet. DOR is not penalizing communities that redo their worksheets as required by DOR and as a result find that their expenditures exceed the ERP qualifying threshold. Communities will receive their 2017 ERP payment even if their revised worksheet shows they exceeded the budget increase threshold. We urge communities that have been asked by DOR to redo their 2016 ERP budget worksheet to communicate with DOR and take advantage of this opportunity to revise their numbers without facing a penalty or otherwise becoming disqualified from receiving ERP payments.