Make No Mistake, Change Is Coming

To the Editor:

The budget process is over, at least until next year. This time around we saw very passionate opinions both for and against the budget increase. Like most people, I try to reconcile the affordability of the increase with the funds necessary to maintain civic standards.

Keeping in mind the following: Budget ending June 30, 2006, $90,006,226; adopted budget 2007, $95,370,206; increase 6 percent.

Revenue derivation (Newtown): State revenue, 8 percent; local revenue, 5.9 percent; property tax, 83.7 percent; surplus, 2.4 percent.

I am not certain what the average household increase in wages was for 2006, but I believe most people will agree that it is well below 6 percent.

People subject to the federal “alternative minimum tax” are no longer allowed a property tax deduction. (If you have not yet felt the effects of the alternative minimum tax, be patient. It will find its way into your pocket. Every year more and more taxpayers are reeling from its effect.)

The alternative minimum tax will, or soon will, eliminate your mortgage interest deduction for state and federal income tax.

If you have an adjustable rate mortgage, you also know that your mortgage payments have been creeping up.

Generally speaking, the income level of Newtown’s taxpayers is not rising in proportion to Newtown’s budget increases. All the more critical considering 84 percent of the town’s revenue is derived from property taxes. Annual budget increases of 6 percent (or greater) are unsustainable.

The other side of the equation is Newtown’s need for funding. Does Newtown need a 6 percent annual increase? I have no way of knowing for certain, but my instinct is that it probably does. Future years may require more than 6 percent. So where does that leave us? Unless you find fault with my logic, our town is on a downward path. The average resident’s ability to fund a 6 percent budget increase will diminish with each passing year.

Taxpayers can probably afford a disproportionate “property tax increase/to income increase” for a few more years, but ultimately things will have to change. And that change will take one of two forms: Either alternative sources of revenue must be developed or town expenses decreased.

At the moment Newtown is in a position where we, the residents, can determine what change will look like in five to ten years. Developing alternative sources of revenue now will shift some of the funding burden away from property taxes in the future.

Many communities rely on local business to fund a significant portion of their budget. Unfortunately, Newtown does not presently possess the business infrastructure to allow this type of move. We could, however, start taking steps today to develop one. Promoting start-up businesses and new and additional forms of commerce is one possible solution. Of course other and better ideas may be available but a course needs to be set now. I would like to know what Newtown’s five-year strategic plan is. Does the town have one? Maybe the town hopes that income levels of taxpayers will stay consistent with future property tax increase — Maybe, but “hope” is not a good business strategy.

If we wait and do nothing, change will be thrust upon us. Probably in the form of decreasing town expenditures. But make no mistake, change is coming.

The reluctance to approve this year’s budget is a warning shot over the bow. The town needs a strategic plan to procure meaningful revenue from sources other than property tax. Otherwise next year’s budget vote may be more than a warning shot and/or the election results of the town board may show very few incumbents.

Change is coming. Let us be the ones to decide what form that change will look like.

Anthony Clark

34 Russett Road, Sandy Hook                                     June 4, 2006