State Representative Richard Smith Discusses State Budget Impasse
September 13, 2017
5th Annual New Fairfield Day THIS Saturday, Sept. 16, 11am – 2pm
September 14, 2017

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NEW FAIRFIELD – The Board of Finance held a special meeting August 30 to determine next steps to take should the state legislature approve a budget that cuts aid to New Fairfield by the full $4.5 million listed in the Governor’s proposed budget.

Earlier this year, New Fairfield’s boards of Finance, Education, and Selectmen had to make some hard decisions in formulating the 2017-18 fiscal year town and school budgets. This forced the Board of Finance to request bare bones, zero growth budgets from both the Board of Selectmen and the Board of Education which meant a 3.99% tax increase to residents. Both boards complied and both budgets were presented and voted for by residents.

Even so, the pared down budgets only accounted for a roughly $2.5 million cut in State aid. The prevailing thought at the time was that only half the Governor’s proposed cuts would materialize. The State has been without a budget since the previous fiscal year ended on June 30. With the legislature set to begin its fall session September 14, the Board met to determine what contingency plan, if any, it should consider.

Randy Collins of the Connecticut Conference of Municipalities (CCM) spoke. He stated that the CCM has been fighting elements of the Governor’s budget, noting that the Governor’s philosophy has been to make the “rich towns” in the state pay more. According to Mr. Collins, 85 of the 169 Connecticut towns, including New Fairfield and Sherman, would lose all educational funding.

BOF Chair Wes Marsh asked Mr. Collins what other towns are doing to prepare for the possibility of a complete loss in funding. Mr. Collins replied that other towns are instituting or planning to institute spending freezes and hiring freezes through attrition and/or layoffs until a State budget gets passed. Some towns are also considering issuing supplemental tax bills. Mr. Collins noted that towns could also begin dipping into reserve funds, although that would be more of a one-time fix for the current fiscal year and would leave towns with devastated reserve funds.

Chairman Marsh said that he was looking at seven areas to find savings or additional funds; freezes, budget line item deletions, Cap & Non project delays, identify additional revenue sources, unassigned fund balance, the Medical Fund funds, and a supplemental tax bill. He noted that if the full cuts as proposed in the Governor’s budget are approved, then the Town would have to come up with another $2 million or so in cost savings and/or additional revenue to cover the shortfall.

Discussion followed on the best way to go about doing this. First Selectman Susan Chapman addressed the Board stating that the Board of Selectmen would be open to looking for cost savings. She stated that as of now the Town did not have any open positions, but that the BOS could look at its budget to see what additional savings could be attained.

Board of Education Vice-Chair Dr. Amy Tozzo also addressed the Board saying that, while the BOE had not met to discuss contingencies this summer, she herself has been thinking of possible contingencies and she felt sure the other board members had as well. She said she was sure it would be on the agenda for discussion at the BOE’s September 6 meeting.

Selectman Kim Hanson asked the  Board to   consider   the   timeline,   namely  what would the “drop dead” date be to take action if the legislature does not pass a budget. He noted that any drawdown of the Cap & Non fund would require a town vote, and it would take time to prepare for that.

Board member Rick Salem suggested a contingency plan as a starting point. He suggested using $1 million from either/or the medical or unfunded reserve funds and $1 million in supplemental tax increase and the balance from reduced budgets of the two boards.

Board member John Hodge said he felt taking from the fund balances was not a good idea and should be a last resort after reviewing both budgets to see if any savings can be found. He noted taking funds from the fund balances would be a one-time fix that would not account for loss of State funding in future years.

Mr. Marsh said that a supplemental tax bill would cost the Town $15,000 to $20,000. He noted that, according to Google, the median home value is $350,000 in New Fairfield, and 70% of that would be $245,000 that you’re taxing. “Our supplemental tax bill if you’re going after a million dollars means that someone with that size house will get an additional tax bill of $154.35.”

He noted some negatives with a supplemental tax bill were that the collection rate would be lower and that a supplemental tax bill could negatively affect next year’s budget vote.

In addressing the timeline issue, Mr. Hodge said that the Board would have to make some decisions by the end of September as it would be 90 days into the fiscal year and whatever cuts would have to be made or freezes put in place would have to be done over nine months rather than 12. He was in favor of having the boards propose contingency plans and see what they come back with.

Finance Director Ed Sbordone noted that there would be a roughly $600,000 budget surplus from the previous fiscal year. Several members of the board noted that the surplus would be the first item applied to the contingency.

A motion was made to request the Board of Selectmen to identify $300,000 in savings from its budget and the Board of Education to identify $800,000 in savings from its budget and report their contingency plans to the BOF by its September 20 meeting. The roughly $300,000 to $500,000 remaining would be covered from the general fund and/or medical fund with the stipulation that whatever is removed from those funds would be restored in the 2018-2019 fiscal year budget.

By Greg Slomba