As the Board of Finance began its consideration of the 2025-26 proposed Town and education budgets at a meeting February 10, they found themselves looking at a budget with a median tax increase estimated at $760 per household.

A number of lost revenues, such as approximately $800,000 in lost revenue for motor vehicle taxes, as well as unexpected expenses such as overruns in health insurance, have driven up the potential tax increase to roughly 6.1%, and that was before late breaking news revealed that the State of Connecticut would be cutting Educational Cost Sharing by $160,000 and completely removing the Municipal Revenue Sharing of Fund Surplus, a $600,000 loss. This would mean the tax levy increase would go to 6.77%, with the town’s addition to the tax levy being 7.23% from 5.6%.

After hearing that newest development after hearing a lot of other bad news, Finance Board Vice-Chairman Jim Gaston said, “That’s not good news either.”

However, board member Barney Molloy indicated that by the time the Board of Finance was done with its budget review, he felt the median tax increase would likely be less than $760 per household.

The Board of Finance has not begun its actual deliberations and only heard budget summaries from First Selectman Jeff Capeci and Board of Education representatives Superintendent Anne Uberti and Board Chair Alison Plante.

The Board of Finance will continue its deliberations at meetings on February 13, February 27, March 6, and March 10. It has a public hearing scheduled for February 20. The budget will then go over to the Legislative Council for its review, leading into a referendum on Tuesday, April 22.

At its last meeting on the budget on February 6, the Board of Selectmen made a number of additions back to the budget including curbside recycling pickup.

The move, adding approximately $823,000 to the town’s bottom line, was in addition to an $86,475 addition to the library budget, a $40,000 addition to the Edmond Town Hall budget, a $50,000 addition to Youth and Family Services, $25,000 to restore the K9 program at the police department, and a number of other small restorations. The proposed bottom line became $50,779,171, a $1,944,665 or 3.98% spending increase. The budget prior to the additions only had a $948,123 or 1.94% spending increase.

According to Capeci at a previous meeting, the Town faces a number of “major headwinds” in the budget including motor vehicle valuation changes and total exemption for permanently disabled residents, meaning a $785,000 loss in revenue, the general fund balance reported at 9.4% in the fiscal year 2024 financials means a $1.2 million loss of fund balance revenue, other revenue reductions totaling $455,000, a $1.5 million for Town and $2.4 million for school employee health benefits increase, the Capital Non-Recurring Fund fully expended by the five-year CIP meaning no available capital funds, a significant Town need for public safety enhancements and contractually obligated expenses not budgeted for in prior cycles.

The motor vehicle changes come from a 2024 State of Connecticut bill that changed how motor vehicles are valuated, changing it to being set by the original Manufacturer’s Suggested Retail Price and going down by a set percentage after each year. Capeci said this cost Newtown $30 million in motor vehicle valuation, which translated into nearly a $900,000 decrease in tax revenue.

Increases in medical costs for fiscal year 2024 exceeded normal medical costs in previous years and “had eaten away from the fund,” according to Capeci. This has required the town to use $2.5 million of the fund balance to pay for insurance costs.

Capeci said a “same services budget is impossible” this year, due to the aforementioned challenges, since doing so would have expanded the spending increase to 4.71% from 1.94%, and drastically raised the tax increase from the Town to 10.55%.

Capeci said there would be fewer part-time staff, moving responsibilities to existing full-time staff, keeping quasi-governmental and nonprofit agencies’ budgets flat, keeping emergency services at or below seven percent, financing capital requests with debt, leveraging alternate funding sources without increasing deficits, and putting a three percent ceiling on the net tax levy increase.

Capeci is looking to add two positions, a facilities director to hopefully save money on large capital projects, as well as a new police officer, a long-standing request from the police department.

The Board of Education budget has a 5.96 percent increase from last year’s budget. That bottom line comes after an amendment to reinstate the K-6 Spanish Program. The budget contains 28.11 full time equivalent position eliminations.

When asked at the February 10 finance meeting if those would be position eliminations or positions that are currently unfilled, Uberti answered that she didn’t have exact numbers, but all of the positions are current positions, with some being filled with temporary instructors in anticipation of a difficult budget year, and some being anticipated retirements.

“We worked to align the reality of the Town’s financial challenges with the school district’s mission and the community expectation to provide high quality education,” Uberti said.

This offsets package, which Uberti first presented at the January 30 BOE meeting, includes: $103,000 for radio upgrades, $65,085 for the reduction of three paraeducators, a $34,000 reduction in facilities projects, $34,000 for four employees that are retiring early but not taking the cash retirement incentive, $20,000 for professional services for evaluations, and $10,000 in homebound tutoring at the high school.

The offsets total $266,085, which Uberti noted on January 30 as not being a full offset of the K-6 Spanish Program, which costs $291,696. However, she said that the offsets would result in enough savings so that their new total increase would be 5.99 percent from 5.96 percent.

Particularly troubling for the school budget was the $2.4 million increase in the health insurance line item, which there was “no way to anticipate.”

“It’s a staggering amount of money,” said Uberti.

Uberti said that a flat budget would have been an 8% spending increase, and there was “no way to get that by cutting pencils and paperclips.” This meant staff reductions.

Editor Jim Taylor can be reached at jim@thebee.com.