Llodra Hopes Health Savings Will Trim Tax Hike To Under Three Percent

By John Voket

First Selectman Pat Llodra hinted to the Board of Selectmen this week that the relative health of participants in the newly created and self-funded municipal health plan could translate into substantial savings in the proposed $107.3 million 2011-12 budget. While the final report on its first-year savings is still a few days away, Mrs Llodra suggested the overall savings — even in the face of some line item increases — could permit the 2011 tax increase to come in at or below three percent.

The first selectman also discussed related savings the town might enjoy from joining a statewide pharmaceutical consortium for employee prescriptions that is projected to save four percent across the board if the town and its workforce agrees to participate.

If those savings are realized, Mrs Llodra plans to request the town use the modest prescription plan savings to establish an employee wellness program to address and likely reduce health claims and corresponding costs further in the future.

The hint about bringing a proposed townwide tax increase to 2.9 percent or less came during an overview of revenues and additional hits to the budget that have developed since selectmen approved the town side of the spending plan with its accompanying projected tax increase of 3.24 percent.

Mrs Llodra said in order to achieve a 2.9 percent overall tax increase in the 2011 fiscal year, the increase in the selectmen’s budget would have to be reduced from 2.72 percent to 2.45 percent, or a $99,574 reduction. While, she said, the school district, with a $69.2 million budget proposal that is double the municipal spending plan, would have to cut $360,000.

“Those are significant sums,” Mrs Llodra told her fellow selectmen February 22. “But the good news is, I believe we’ll have some very positive news from our insurance consultant.”

She said that if the low rate of claims holds out as expected, the savings will not only be able to reduce the overall budget, but will do so in the face of anticipated increases for motor fuel, and a net loss in intergovernmental revenues.

The first selectman reported that the town is expecting a reduction of about $20,000 from Hartford in the PILOT program, which provides a lump sum payment in lieu of taxes for state buildings and property within Newtown’s borders. Those facilities include the Garner Correctional facility and the Second Company Governor’s Horse Guard operation, both off Wasserman Way.

The town is also anticipating losing revenues because of a pilot program that exempts manufacturing machines and equipment (MM&E) from local personal property taxation. Newtown Assessor Chris Kelsey told The Bee after the meeting that the final projected loss to Newtown for the 2011 fiscal year is $192,643.

Those revenue losses, however, will be offset by an anticipated increase in conveyance tax revenue, a percentage of which goes to all towns when real estate changes hands, or is conveyed. The anticipated increase in the percentage going back to the communities where the transactions originate could mean as much as a $375,000 windfall for Newtown next year.

In addition, Mrs Llodra said a one-time educational jobs grant is expected to soften the loss of federal economic stimulus funds that expired this year. Those American Reinvestment and Recovery Act or ARRA funds totaled $626,000 for Newtown in the current fiscal year.

In all, the net loss since both the town and school budgets were finalized and sent on to the finance board for review is about $90,000. Ms Llodra told her colleagues that the net loss is anticipated to be “more manageable than it might have been otherwise.”

Brownfields Grant

In other news, the selectmen learned this week that a $100,000 federal grant through a Derby-based brownfields initiative was increased enough to cover the remediation of all the vacant duplexes at Fairfield Hills. Those buildings are expected to be transformed into a social and human services suite of offices anchored by Kevin’s Community Center, Newtown’s free health clinic for the uninsured.

Mrs Llodra and other officials have discussed ideas to relocate the town’s Social Services functions, and a local food pantry, as well as possibly the Newtown Youth & Family Services operations, to the cul-de-sac adjacent to the new municipal center. After a request to increase funding by the town, Mrs Llodra said an additional $22,000 was provided.

The selectmen also agreed to accept an additional grant of $100,000 to support the Sandy Hook Streetscape program. Mrs Llodra said that the town will continue to apply for these grants to offset capital bonding earmarked for the project, which is now reduced from $1 million to $900,000.