NEW FAIRFIELD – At its March 8th meeting, The Board of Finance met with local state legislators to discuss Governor Dannel Malloy’s proposed State budget at its potential impact upon the Town of New Fairfield’s municipal and school budgets.
State Senator Michael McLachlan, 24th District, State Representative Richard Smith, House District 108, and Randy Collins of the Connecticut Conference of Municipalities (CCM) were on hand to discuss their take on the situation in Hartford.
According to a document produced by the CCM entitled “Governor’s Proposed FY 2018 State Budget Impact on New Fairfield”, state grants to the Town of New Fairfield would decrease 87.9% from $4,937,874 to $596,205, a cut of $4,341,669. If the Governor’s budget were to be ratified as it stands now, the Town would have to make up that shortfall either but cutting the municipal and school budgets, increasing taxes, or a combination of both.
Board Chair Wes Marsh began the meeting by asking for some opening comments from the Legislators as to what’s going on in the Capitol, when will the towns know what they have to work with and what’s going to happen.
Senator McLachlan spoke of a “brutal budget environment” in Hartford. He said municipal and education officials, including First Selectman Susan Chapman and Superintendent Dr. Alicia Roy have been regular visitors to the Capitol advocating for cities and towns throughout the state.
The timeline is a challenge. Normally, he noted, the deadline for the State to have its budget submitted is the first Wednesday in June, well after the time when most municipalities have sent their budgets to a town vote. With the volatility and uncertainty of funding this year, towns cannot budget with certainty. Senator McLachlan indicated that he initiated a bill that is pending at the Capitol to require that the municipal grants portion of the state budget be finalized by April 1st which would help give municipalities a better sense of the extent of funding from the State. The bill is being co-sponsored by 72 other legislators on “both sides of the aisle”.
Mr. McLachlan said that a counter-proposal was made by the Democratic caucus to postpone the State budget beyond June as well as revise the budget statutes. It came up against great opposition because it would give towns the option to “kick aside” the town budget process, which would mean doing away with legal notice and public hearing requirements. The proposal wound up being tabled for the time being.
He noted that it will take some hard work on the part of the Legislature to make some tough decisions. He believes we can make it through this, but they can’t do it by pushing it off down the road as has been done in the past. They will have to find areas of excess to cut.
Mr. Marsh asked if Mr. McLachlan had a sense of whether or not all of the proposed $4.4 million in funding cuts would be put through or would there be only a portion. He stated that the Town could not wait until summer to set a budget and was wondering what the odds were.
Mr. McLachlan said that there is no way to know for sure, but that he has heard that other towns are preparing budgets that incorporate half the amount of the proposed cuts. In other words, if New Fairfield would have to increase taxes by 10% to account for the full $4.3 million cut in state funding, then they should target a 5% tax increase.
Board member Cheryl Reedy asked if there was more of a chance for the ECS grant to be cut or the State’s teachers’ pension contribution to be shifted to the Town. Mr. McLachlan said that the teacher pension responsibility would have to be retained by the State and not passed to the municipalities because the bonds used to fund it are a State liability.
Representative Richard Smith spoke next. He expressed his frustration with the process in Hartford. “The Governor has completely washed his hands of his obligation to put forth a budget that’s real. It’s not real,” he said. “The problem is, we don’t know what to do with it. We know we can’t use it, we know the town(s) can’t rely on it. You’re asking fair questions, questions that you should know answers to. We’re still so deep in the process…it’s hard to give you a fair answer.”
He went on to say that drastic cuts at the State level will have to be made, and hard questions will have to be answered, but that both Republicans and Democrats are working hard at it to deliver a responsible, balanced budget.
Board member Michael Cammarota asked, “What would you do if you were us?”
Mr. Smith said he’s heard that 1% of the pension responsibility would fall to the towns and that accounting for half of the proposed cuts in the budget would be a rule of thumb going forward.
Board member Jane Landers stated that the state’s situation is driving people out of the state and will continue to do so. Mr. Smith agreed, saying that he is seeing that too. He indicated that towns like New Fairfield are being fiscally responsible while the State has not been.
Board Member John Hodge said that in his opinion the State’s biggest failing is that they have completely overestimated the revenues so that they could say they were proposing an accurate budget and that they did not cut items when they have come up short on revenue, something that towns like New Fairfield have done in the past.
Board member Brian Shea asked if this is a trend that will continue in the future—that the State is pulling away from its support of municipalities. Senator McLachlan said for the foreseeable future we should count on that, given how deep the problem is today.
Ms. Reedy asked if the State could reduce some of its statutes restricting school budgets and property assessments, i.e. not being able to fund schools less than the previous year or allowing towns to conduct property revaluations every ten years, rather than every five to save costs. She noted that not being able to reduce the school budget as much as might be needed would force them to gut the town budget, or if property values have not fluctuated greatly, it might not be necessary to spend the $250,000-$500,000 it costs to conduct a reval.
Senator McLachlan noted that minimum budget repeal has been put out there for years, but he feels that it has more support this year. He said that there are many towns like New Fairfield across the state with declining school populations that might benefit from that.
Mr. Hodge said there might be mandates the State can repeal that would enable towns to cut expenses. He noted that setting a budget right now is a “crap shoot”, either the town will wind up over taxing when it doesn’t have to, or it will cut services unnecessarily.
Mr. Marsh brought it all back to this year’s budget by saying that whether we vote on a budget at the regular time or move a vote back to the summer, the Town will be looking at least a couple million dollar loss in state funding. That will mean a combination of definitely increasing taxes as well as having both town and education budgets coming in a a 0% increase over last year.
The Town has already submitted a budget that is 0.69% less than the previous year. The Board approved a motion to have the Board of Education prepare a 0% increase budget by March 29 with the possibility of making further cuts. The BOE’s current budget proposal is for a 2
Ms. Reedy indicated that she is thinking that instead of gutting town and school services right away to come up with a low tax increase, the Board should consider putting out a budget that would mean a higher than normal tax increase—say 3% to 5%–and give the taxpayers a chance to vote and approve or not.
The Board agreed that they need more information from the State on actual numbers of cuts as well as what a 0% increase budget from the schools would look like before anything can be finalized. On that note, the meeting was adjourned. The next Board of Finance meeting will be held on Wednesday, March 22.
By Greg Slomba