Chicopee City Council appropriates funds to provide tax relief

Mayor John Vieau talks about two allocations that look to lower the tax levy and invest in employees’ future benefits.
Photo credit: ChicopeeTV

CHICOPEE — Several days after Mayor John Vieau submitted his recommended fiscal year 2027 budget, the City Council unanimously approved a pair of mayor’s orders, including one that provides relief to Chicopee taxpayers, during its June 16 meeting.

One of the orders approved by the council includes $3 million for the reduction of the fiscal year 2027 tax levy from the city’s undesignated fund balance free cash account.

Vieau, who acknowledged that other surrounding communities are struggling in their budget seasons, said that the $3 million in free cash will alleviate some of the burdens on Chicopee taxpayers. In his remarks to the council, he gave a shoutout to his finance team, which meets almost every two weeks to talk about the finances of Chicopee.

“The great news is that we’re able to take free cash and use that as tax relief. In other communities right now, they’re suffering, looking for Proposition 2 1/2 overrides, and we’re looking to reduce our taxes,” Vieau stated. “People are having a hard time right now making ends meet with inflation, shrinkflation, all your bills are going up, expenses are high, and I couldn’t see a better way than contributing towards tax relief.”

Vieau also explained that the city is below the levy limit and noted that this move will not be used to balance the budget.

“When you’re above Proposition 2 1/2 … and you’re using money that you have in your free cash account, that’s called using reserves to balance the budget, and that’s not the case here,” Vieau explained. “This is actual tax relief to our taxpayers, whether it be residential, commercial [or] industrial. This is a $3 million transfer from free cash to the levy, and the goal is to lower tax increases coming up when you set those rates in the near future.”

Vieau recently submitted a recommended FY27 budget of approximately $283.5 million to the City Council, representing an increase of approximately 2.6% from FY26.

The Committee of the Whole is set to host budget meetings on June 22, 23 and 25 to meet with each department for their budget hearing before voting on the FY27 operating budget.

Vieau shared that the city is once again able to propose this allocation because of where the city currently is financially.

“I can assure you I’ve gone through every single line in that budget with every department head, and I expect you’d be doing the same and looking at creative ways of saving money in our community, but I can share that we’re in a fiscally responsible position to be able to do this this year again, and I want to continue to take that burden off of our taxpayers,” Vieau said.

The other order approved by the council moves $1 million of free cash to the other post employment benefits trust fund account to invest in future benefits of employees.

Vieau explained that OPEB is an unfunded liability and said the state has asked municipalities to fund that liability and the retirement of others.

“As the city moves closer to being fully funded in our retirement, the next goal is to get fully funded in moving forward with the other post-employee benefits, which means for our retirees, looking at their health insurance, their dental insurance, it’s anything other than the actual retirement that has been contributed to over the years,” Vieau stated.

Vieau also explained why the city should start investing free cash into this account, especially because the unused free cash expires on June 30 and is put in the general fund.

“When you look at the OPEB account, we really need to start investing more into it, and it’s best for us,” Vieau explained. “Of course, it’s mandated by the state, and also the goal is, it enhances our bond rating capacity. We get better bond rates, so our goal is to start focusing on OPEB.”