Budget Passes, Tax Rate Set

By John Voket

With a total of 3,771 votes cast, representing about 24 percent of eligible taxpayers, the affirmative 2,018 ballots carried the day, passing a $105,555,075 budget request for the 2011-12 fiscal year. According to local registrars, 1,850 taxpayers rejected the budget proposal at the second-round May 17 referendum, a difference of 168 votes.

The first round referendum April 26, which requested approximately $106.6, million failed by 266 votes.

Legislative Council Chairman Jeff Capeci at first only offered one word in response to the final count: “Relief.” But after a few moments, he offered a brief observation.

“We listened to the voters who overwhelmingly wanted a reduction,” he said, referring to the first round budget rejection.

One night later, the council met and set the tax rate for the next fiscal year at 24.37 mills, representing an increase of 0.37 mill. A mill represents one dollar for every $1,000 in taxable property.

The council, along with First Selectman Pat Llodra, Finance Director Robert Tait, and Board of Finance Chairman John Kortze, also spent almost 90 minutes May 18 discussing budget challenges and theorizing on ways to try to address future budget and community needs as local property taxpayers.

Board of Education Chairman William Hart was asked to attend to offer his thoughts as well, but Mr Capeci told the council that the school board chairman was out of town on family business.

The council dug right into discussions about working to reduce the future burden on Newtown taxpayers on the suggestion of Councilman Gary Davis, who suggested the council immediately begin planning how to achieve an across-the-board one percent reduction in taxation before taxpayers are called to vote on next year’s budget request.

Describing his idea as a “bolder vision” for the community, Mr Davis’s suggestion was immediately checked by Council Vice Chair Mary Ann Jacob. Ms Jacob said because by state law, the town cannot fund the next annual school district budget at an amount below the previous year, achieving such a radical reduction in taxation would require the town-side to cut $4 million.

Mrs Llodra said anticipating the discussion, she and Mr Tait prepared a document in part outlining what expectations taxpayers should have as the town moves toward the 2012-13 fiscal year. She detailed an expected ten percent increase in overall health cost, a modest pension contribution increase, and debt service costs that are carried fully in the town side budget, already projecting about a $3 million increase over the budget that was just approved for the 2011-12 fiscal cycle.

The first selectman said that Newtown’s school and municipal services receive about 90 percent of their underwriting through property taxation. Only about 7.7 percent of Newtown’s grand list — a list of the assessed value of all properties — is commercial or industrial. She said to bring Newtown up to par with other towns sharing similar demographics and characteristics, commercial and industrial taxation should be at about 12 percent.

“We’re out of balance,” Mrs Llodra said. “We need more revenue from commercial sources.”

In lieu of the town experiencing a huge influx of commercial development in a relatively short time, council member Kathryn Fetchick said it was up to the Boards of Selectmen and Education to “strive to be more efficient.” But Ms Fetchick said that in her opinion, it was not the council’s role to direct the selectmen and school board members how or how much to reduce their services to achieve tax savings.

She also joined with other council members, including Richard Woycik and George Ferguson, suggesting the council invite state legislators in to “talk about what the council can do to combat unfunded mandates.”

Mrs Llodra circulated a 12-point plan she crafted with Mr Tait, which she described as a “strategic plan for increasing efficiency and reducing costs.”

Mr Woycik said the town is faced with a finite number of resources to fund its overall operation, and that it is the council’s job as the last step in the budget process before a taxpayer vote to judge what services are most important and benefit the entire community.

Councilman Kevin Fitzgerald suggested the council or the town develop a scenario of what a one-percent taxation reduction would look like, to help taxpayers understand how the town would have to manage with such a reduction in revenue.

The council then heard a presentation from Mr Kortze, who said Mr Davis’s idea was “extremely nebulous,” but came with some merit.

“Why doesn’t the council come up with ideas you can agree [on] and pass a resolution on what the Board of Finance should look into; what the Board of Selectmen should look into; what the Board of Ed should look into,” Mr Kortze said. “But to couch in moving forward giving parameters is fraught with danger.”

Mr Kortze said prior to the most recent creation of the Board of Finance, a previous council did enter into the budget deliberation process placing parameters on how much of an increase the council would approve.

“It died an instant death and created a fair amount of animosity going into that budget season,” Mr Kortze recalled. He said that the primary flaw in Mr Davis’s idea was that it attempts to legislate other elected bodies and the action of future councils.

The finance chairman suggested the council convene a task force made up of representatives in town who could effect a comprehensive and consistent position among all agencies and appointees regarding the town’s largest tax liability — union contracts.

“That’s getting right to the source of our issue,” he said, adding that during the 2010-11 budget deliberations discussions and projections were made to address structural issues, demographic issues.

“The end result of that was a recommendation on insurance, a recommendation on consultants, a recommendation on excess cost revenue, on overtime, unemployment, on workers comp, turnover, early retirement, almost all of which came to fruition,” Mr Kortze said. He added that in order to better understand how the actions of the school district are impacting the budget on a regular basis, the council needed to put more pressure on the school board to clearly and frequently articulate their budget transfers.

Mr Kortze said there are already processes in place that facilitate moving budget information from the Boards of Finance, Education, and Selectmen up to the Legislative Council level, where the political decisions must be made, and those processes may be compromised if the council attempts to micromanage those boards.

After additional discussion, the original motion from Ms Jacob was modified to request the council’s Finance Committee to take up Mr Davis’s idea, and to determine how to best communicate the goals and ramifications of the proposal to the full council and the public.

That motion passed 9-1 with Mr Woycik opposing. Councilmen James Belden and Benjamin Spragg were absent.

Following the first failed referendum in April, the council met and voted to reduce the town-side request from $37,922,648 to $37,583,648, and the school district request was reduced from $68,703,427 to $67,971,427.

It is now up to First Selectman Pat Llodra to carry out the reductions she offered to accommodate the latest town-side appropriation. The Board of Education similarly will meet and affect the reductions to its original approved budget proposal before the end of the current fiscal year June 30.