Tax Bills Head Out—

Budget Finally Goes Through

By John Voket

Savings accrued in the very fund balance that became key point of contention in this year’s budget process will likely be tapped to offset operational expenses until revenue from tax bills replenishes the account, according to Newtown Finance Director Robert Tait. But having the financial flexibility to rely on the fund balance has mitigated the expense of floating tax anticipation notes to pay bills that come due before mid-August.

“That’s exactly what the fund balance is for, isn’t it?” Mr Tait said on Friday, July 13, the morning after Newtown’s fifth-round budget referendum passed with the highest turnout of eligible voters this year.

Voting officials at Newtown Middle School June 12 logged 2,568 Yes votes versus 2,412 No votes. The referendum requested $106,246,838, which will result in an overall tax increase of 0.69 percent.

The Legislative Council also met quickly on the morning of July 13, setting the tax rate for this year at 24.69 mills. A mill represents $1 of taxation for every $1,000 in taxable property.

That council action permitted the tax collector’s office to complete calculating and authorizing the printing of tax bills. Tax Collector Carol Mahoney expects those bills to be processed and mailed on either July 26 or 27, to ensure they are in taxpayers’ mailboxes by August 1.

The delay of the budget’s approval and mailing of tax bills has already accounted for a one-month delay, and because of the Labor Day holiday, Ms Mahoney said the deadline or expiration of the grace period to make local tax payments will be September 4.

The tax collector said the town’s vendor for processing turned around the production of the bills overnight, and they are on their way to a mail house vendor now. Ms Mahoney also said taxpayers should not be confused because the return address for payment is a post office box in Woburn, Mass.

“It’s not a typo,” Ms Mahoney said. “Since the town uses Newtown Savings Bank as its banking vendor, the bank determines which lock box payment processing center to use, and there aren’t too many of them. The decision to use the Woburn processing center had nothing to do with any decision the town made.”

Ms Mahoney said it is the second year the town is having its tax payments processed by the bank’s vendor, and that the former vendor that was located in Connecticut has since gone out of business. She also said the new vendor uses optical scanning technology that the former vendor did not offer, which has “significantly minimized errors” in the accounting and reconciliation process for tax payments.

Preparing For 2013

First Selectman Pat Llodra said she hit the ground running after this year’s budget approval as well, proceeding with a reduction that matches the town’s operating budget circa 2008. She is scrutinizing commitments, departmental requests, capital projects, and contingency accounts as she begins readying for the early stages of next year’s budget preparation process.

“The contingency is really our safety zone,” Mrs Llodra said. “We’ll have to be careful with every dollar, monitoring expenses through next June so we don’t have to rely on contingency unless there is an emergency or extraordinary event.”

In her “monitoring of the daily draw,” Mrs Llodra said she will recommend delaying some planned projects until later in the year “to be sure we maintain enough for priorities and operational expenses.”

The first selectman said one costly project — the Poverty Hollow Road bridge replacement — has been delayed at least until next spring because state environmental permitting and review is expected to continue past this year’s construction season.

“That buys us a little cushion to help get us through the winter,” she said.

As Mrs Llodra and Mr Tait begin orienting toward the next budget cycle, Mrs Llodra said she will honor taxpayers’ wishes to “keenly economize, and work to make the town’s operations more efficient on behalf of all those who share a great concern for the tax burden.”

Board of Finance Chairman John Kortze shared a similar sentiment, saying any expectation that the majority of taxpayers are eager to fund a “same services budget” is in stark contrast to what he is hearing from local families, many of which are unable to afford the same budget expenditures as last year.

“Presenting the notion that same services is the way to go is flawed. In my opinion, most of Newtown’s households are not operating on a same services budget,” Mr Kortze said.

Future Charter Provisions

Mr Kortze said he was also happy to see the new Charter Revision Commission seated, and that there will be further discussion of posting advisory questions on the next budget ballot in April 2013. Those questions, if recommended and approved by voters, are designed to help the council understand if taxpayers are endorsing or rejecting the budget because it is either entirely, or its separate segments, are too high or too low.

The finance chairman also praised the current Board of Education for discussing the handling of its budget options in public.

“This is a long way from being presented with an ‘option A and option B’ two years ago,” Mr Kortze said. “It may have been a painful process [publicly vetting district budget options], but it was the right way to do it.”

Moments after the budget vote results were announced July 12, council Finance Committee Chair George Ferguson and Education Committee Chair Kathryn Fetchick both referenced the new Charter Revision Committee, which had been seated the night before.

“Next year, hopefully we’ll have a few more tools in the toolbox to give us guidance,” Mr Ferguson said.

But Ms Fetchick warned that a charter change would not necessarily be a panacea to quell budget controversy.

“I think there will still be heated discussions as to what the winning formula will be for the school district,” she said. “You don’t get a lot of taxpayers advocating for or against the town side [budget proposal].”

She said that the outcome Thursday evening still proved a significant number of taxpayers are still unhappy.

“Somehow we have to address the concern those taxpayers have about spending,” she said. “Maybe that’s where we can pick up at the next council meeting.”