Budget Round 2—

Council Cuts Tax Increase To 2.4 Percent, Plans May 18 Referendum

By John Voket

After conducting a special budget “summit” meeting on April 29 to receive comment from members of the Boards of Finance, Selectmen, and Education, the Legislative Council approved sending a revised budget proposal to taxpayers that reduces an overall tax increase to 2.4 percent.

Council Chairman Jeff Capeci told The Bee the following morning that pending review by the town attorney, he is planning to file the new budget proposal with the town clerk in time to satisfy a charter-mandated deadline, while keeping within parameters that will permit the next referendum to occur on Tuesday, May 18.

Several council members viewed the latest development optimistically, calling the April 29 proposal a “win-win” situation because it reduces taxation while providing additional funding for school district operations that was previously earmarked to be spent on health insurance coverage.

Council Finance Committee Chair Ben Spragg explained that the original town and school health insurance quote was $13.5 million, which is in the current budget.

“The town has $3.5 million and the school board has $10 million,” Mr Spragg outlined in an email. “On April 27, the [town’s] health insurance consultant revised the quote with more up-to-date information and lowered the quote by $500,000 to $13 million. The town’s portion is reduced by $125,000 and the school system portion by $375,000.”

Mr Spragg said the school system will see the $375,000 reapplied to other areas of its budget and another approximately $50,000 to $60,000 from the additional revenue the school board is expected to receive from the excess cost state grant for a total of $435,000. Additionally, taxes will be reduced by one-half a percent, to a 2.44 percent increase from the proposed increase of 2.99 percent that failed in an April 27 referendum.

In addition, the council acted on information from First Selectman Pat Llodra, who presented additional proposed reductions to the town spending plan totaling $503,000. Those savings would come from further town health insurance savings of $125,000 and $18,000; a contingency fund reduction of $100,000; a police salaries line cut of $60,000; and a reduction in the debt service line of $200,000.

In regard to the debt service reduction, Mrs Llodra proposed achieving the $200,000 savings from part of the sale of financed portable classrooms that are currently at the high school.

“Next fiscal year, the town will be selling the portables,” Mr Spragg said, adding that the town can use $200,000 of the proceeds for debt service.

“That is the proper use of the proceeds from the sale of the portable classrooms — to reduce the debt that was incurred,” Mr Spragg continued.

Proposals To Restore Funds

Much debate centered on a series of proposals to add more money back to the school district, starting with a suggestion from Councilman Gary Davis to reduce town-side spending an additional $450,000 to effect a total reduction of $953,000, with the caveat of transferring $450,000 back to the school district.

Councilman Kevin Fitzgerald then moved to transfer $250,000 from the town-side reductions back to the school district. But Mr Spragg pointed out that such a move would only reduce taxation from 2.9 to 2.8 percent.

“That does not address the [taxpayers] that want tax relief,” Mr Spragg said.

Councilman George Ferguson than suggested an “olive branch” gesture of providing a $100,000 transfer from the town-side reduction to the school district. But again, Mr Spragg countered that move would only reduce the proposed tax increase to 2.6 percent.

“I think we need to get to a 2.5 percent tax increase,” Mr Spragg said.

Mr Ferguson’s amendment and Mr Fitzgerald’s motion subsequently failed, which brought the council back to its original position considering only the town-side reduction, and regarding the additional savings developed by the school district as a way to free up funds to spend on items that the rejected $104 million budget would not have funded.

Following the meeting, Mr Capeci explained that the “realized savings is a net increase to the Board of Education’s budget, because the district will pay less for insurance, which in turn provides them with increased funds to apply to educational programming.”

He said the original funds were “earmarked for insurance, and could not be used for academics.”

“We did not further reduce the school budget, which I think a lot of people were expecting. Now the district has a net increase to what they could spend on education,” Mr Capeci said. “We thought this was a reasonable compromise — a modest reduction in taxation [from the failed increase], and a net gain to the Board of Ed. It’s a win-win, because both sides are coming away with something.”