Thursday Referendum Planned—

Budget Rejected Again;

Council Applies $200K In Tax Reductions

By John Voket

Following the defeat of a fourth-round budget referendum June 26 by a 19-vote margin, the Legislative Council found itself in the frustrating position of trying to please every participating taxpayer enough to persuade them to cast a Yes vote on round five.

The council, at the recommendation of First Selectman Pat Llodra and Tax Collector Carol Mahoney, also broke from tradition by scheduling the next budget vote on Thursday, July 12. That change from the traditional Tuesday referendum would help the town meet a tight deadline on processing and delivering tax bills before August 1, provided the next budget proposal passes.

The latest referendum was defeated by the closest margin this year, with 2,108 No votes outweighing the 2,089 Yes votes. But that close margin created an unenviable task for the council, which, after a half-dozen failed motions and amendments, ended up reducing taxation by an additional $200,000 while refusing to reduce either the town or school requests further.

The $200,000 in reductions will come from the town’s proposed fund balance and contingency fund.

Public comment before discussions began was almost evenly divided between those demanding a zero-tax increase, and those wanting funds added back to the school district’s proposal.

Resident David Nelson, who said he has two grandchildren in the local school system, advocated for reducing the school budget by $654,000. Calling for the council to create a new district budgetary “base line,” he proposed bringing the district spending plan to the lowest allowable amount before state sanctions would occur.

“It’s about time we made some tough choices,” Mr Nelson said.

David Wheeler, on the other hand, sided with several other speakers requesting funds be reallocated from elsewhere in the budget proposal to add funds to the school district’s request.

“I understand the point of view to keep taxes at a zero level,” Mr Wheeler said, “but it doesn’t reflect the future of this town — our future is in the schools.”

Following public commentary, the council heard an extended presentation from Board of Education Chair Debbie Leidlein who announced up-to-the-minute calculations to provide for a “same services” budget that does not include full-day kindergarten.

She told the council that after working with Superintendent Janet Robinson and district Business Manager Ron Bienkowski, the district could move into the new fiscal year with almost $9,000 in excess of the “same services” funding level.

Ms Leidlein also presented a worksheet she said was developed with the cooperation of the four local elementary school principals to provide for full-day kindergarten. The suggested reductions would not deliver a “same services” scenario, but the school board chair said the adjustments would have little or no impact on instructional services.

“The principals feel strongly about full-day kindergarten,” Ms Leidlein said. A few minutes later she added the principals “believe the loss of these services is outweighed by adding full-day kindergarten.”

Ms Leidlein also presented a staffing document in response to concerns about teacher/student ratios and class sizes, which showed that each of the four elementary schools would continue to provide class sizes well within the guidelines permitted by the district and teachers’ contract.

Eliminate Fund Balance

The first motion regarding a new budget proposal was made by council Vice Chair Mary Ann Jacob, who moved to eliminate a planned $200,000 fund balance infusion, which would further reduce a tax increase to 0.69 percent.

Speaking to both factions of No voters, Ms Jacob said that those requesting a zero-tax increase would have the spending plan reduced by an additional $850,000, while others are requesting the council add money back to the school district request to at least achieve a same services scenario.

Ms Jacob said after hearing from the school board chair that she was “confident the Board of Ed can provide same services, and has some flexibility,” while at the same time striking a compromise between those who want full-day kindergarten and those demanding at least a same services budget.

The council vice chair also said that she does not “like the idea of reducing the fund balance, but I didn’t expect to be in this position.”

During discussion on that motion, Ms Leidlein asserted that the elementary principals would not want to make a choice between the suggested reductions and full-day kindergarten, “but they are willing [in order] to get full-day kindergarten.”

Council representative Kathryn Fetchick was against further reducing the fund balance, saying that resulting action on the part of bond rating agencies could saddle Newtown taxpayers with significantly higher borrowing costs for the next 20 years to make a short-term budget fix.

First Selectman Pat Llodra weighed in saying while she was a staunch advocate for fiscal policies that position Newtown to thrive and grow, she recognized that the council was facing challenges so great that they should consider the fund balance option versus further reducing either operating budget.

Councilman George Ferguson said the premise of delivering a same services school budget was unattainable because of so many other factors that have or will change before the next school year begins.

“The concept of same services is like chasing a ghost,” he said. “We can never achieve it because you can’t define it.”

At the same time, he defended maintaining a fund balance infusion, saying it was the single most important thing the community could do in the current budget, because it was “the only thing that has an ROI [return on investment] for the taxpayer.”

Councilman Paul Lundquist then suggested taking the remaining $200,000 fund balance allocation and transferring it to the school budget contingent upon the district implementing full-day kindergarten. But he was reminded that the council could not mandate contingencies to the school district.

At that point his motion to transfer the $200,000 with no stipulations failed 10-1. Councilman Robert Merola was not in attendance for the meeting.

Returning to the main motion, a voice vote failed by a 6-5 margin.

Ms Fetchick made the next motion to reduce the school budget request by $200,000 and the town request by $50,000.

“I think it’s reasonable,” Ms Fetchick said, adding that while there are those requesting a zero tax increase, it would be difficult to slash $850,000 because so much of it represents debt service already committed to capital projects.

‘A Tremendous Mistake’

Ms Leidlein reacted to that motion saying that further reducing the school budget was “a tremendous mistake.”

“When you cut $200,000 there are going to be reductions in services,” she said, “and it will wipe out any chances this year of moving the district forward.”

Mr Ferguson then asked to amend the motion reducing the school request by $100,000 and the town by $25,000. He defended his motion saying there was an expectation on the part of taxpayers to further reduce spending.

“We’re going to have to sharpen our pencils. We have to get a budget passed,” he said. To which Ms Leidlein replied, “Our pencils have been through the sharpener many times. We can’t accept a further reduction to this budget.”

Even Ms Llodra agreed, saying, “It is the wrong road to take.”

Mr Ferguson then withdrew his motion.

Councilman Dan Wiedemann then proposed a $300,000 reduction to the school budget and a $50,000 reduction to the fund balance, which failed 10-1. The main motion on the floor than subsequently failed 9-2.

After a brief break, the council returned to hear Mrs Llodra saying that reducing the fund balance infusion to $100,000 would put the town slightly closer to its goal of reaching an eight percent fund balance ratio, without making the fund balance “go backward.”

Councilman Phil Carroll then moved to reduce the fund balance by $100,000 and to reduce the town contingency fund by $100,000. Councilman Mitch Bolinsky countered with an amendment to take the full $200,000 from contingency, which failed 6-5. The final amendment was suggested by Mr Lundquist to provide $100,000 to the school proposal and to reduce the town budget request by $50,000, but that amendment did not receive a second.

Mr Carroll’s motion then was called and passed by an 8-3 margin.

In a flurry of final motions, the council approved sending a fifth-round budget to taxpayers requesting $106,246,838 in revenue and expending $106,146,838 — accounting for the $100,000 fund balance infusion.

In final public comments, Board of Finance Chairman John Kortze said he was sorry that the council did not consult with his board before making motions to reduce the town contingency fund, and the fund balance allocation further.

Mr Kortze said in the future, the council should consider taking an extra day to meet after a failed referendum to consult with the finance board, so they could be made aware of the deeper implications of such actions.

If approved at referendum on Thursday, July 12, the new budget would increase overall taxation by 0.69 percent.