Town Anticipates Additional State Revenues

By Jan Howard

The General Assembly recently passed state budget adjustments for fiscal year 2004-05. The package includes additional funds for towns and cities and includes an extension of the real estate conveyance tax increase for another year.

First Selectman Herb Rosenthal told Legislative Council members last week that a preliminary analysis indicates the town would receive $315,239 in additional funding from the state than was originally anticipated.

Mr Rosenthal said the additional funding includes $55,685 in town aid roads, which will offset some of the cuts to the town’s road budget. This funding can only be spent on roads, he said.

Also received was an additional $57,715 for PILOT (Payment in Lieu of Taxes) and $121,748 for an ECS (Educational Cost Sharing) grant. Also included in the amount is $80,000 the Legislative Council added as revenue to pay for two police cars that were reinstated to the budget.

The PILOT and ECS funds, totaling $179,463, are considered general revenues and would be part of surplus, Mr Rosenthal said.

Mr Rosenthal said the General Assembly also decided not to sunset the real estate conveyance tax increase. Originally approved for 15 months, the tax was to end on June 30. Instead, it voted to continue the tax for one more year.

“It was worth a half million dollars this year,” Mr Rosenthal said. “We estimate the same for next year.” The extra tax is collected and kept locally, he explained.

He noted, however, “This is not supposed to be considered permanent revenue. It is not in the revenue stream. It is one-time revenue, and will be part of the surplus for next year.”

Mr Rosenthal said the amount from the conveyance tax this year “helped mitigate losses in revenue.”

The town anticipates receiving a total of $6,305,814 from state revenues, which includes PILOT, $1,484,310; Pequot/Mohegan, $477,117; Public School Transportation, $180,071; Non Public School Transportation, $13,094; ECS, $3,803,077; Town Aid Road, $148,121; and LOCIP (Local Improvement Projects), $200,124.

Mr Rosenthal also told council members that the town has 545 applicants for senior tax relief for a total revenue loss of $649,630. This is $49,630 more than the revenue loss cap of $600,000, he noted.

He suggested the Legislative Council could vote to increase the cap. If the cap is not increased, some applicants would have to be denied, he added.

Legislative Council Chairman Will Rodgers suggested that the ordinance committee look at the possibility of eliminating the cap on elderly tax relief. The issue would be on the council’s next agenda.

In other business, the Legislative Council voted to authorize the financial director to make any nominal transfers that may be required to end the fiscal year 2003-04.