Date: Fri 26-Feb-1999

Publication: Bee

Author: STEVEB

Quick Words:

budget-debt-council

Full Text:

Town's Burgeoning Debt Gives Council Members Pause

BY STEVE BIGHAM

According to figures recently released by the state, Newtown ranks 6th out of

the 169 Connecticut towns in debt per capita.

Newtown's per capita debt has topped out at $2,313 for the fiscal year ending

1997, far above the state average of $1,195.

Finance Director Ben Spragg said the numbers are just another indicator of the

town's recent spending.

"When you're looking to determine what is an acceptable level of debt, you use

bench marks. This is one of the bench marks," he said.

Moody Investor Services also provides a bench mark, waving a red flag whenever

a town's debt payments exceed 10 percent of its overall expenditures.

Newtown's debt continues to inch closer to that figure.

"Bench marks are part of using good judgment. Someone has to make that call

and this is one of the things they refer to."

Among those who have to make the call is Legislative Council member Karen

Blawie, who shudders when she thinks of all the money that still needs to be

spent.

Topping the list of projects which threaten to place the town deeper into debt

is a 23,000-square-foot addition to Edmond Town Hall ($18 million) and a new

school for grades five and six ($15-20 million). And recently, there has bee a

groundswell of support for the purchase of the Fairfield Hills property ($10

million).

The town's overall indebtedness already exceeds $50 million.

"We're just too indebted as it is," Mrs Blawie noted.

The annual town budget is on the rise, too. The proposed budget for 1999-2000,

includes a 12 percent increase in the Board of Education's budget request. The

overall budget is up 2.3 mills or more than 8 percent. That seems unreasonable

to John Kortze, the council's finance chair, especially as the town finds

itself deeper and deeper in debt.

"This is something that town officials need to understand when they produce

their budgets. I know it's not their job to analyze (the town's finances), but

they need to understand it. I think it's a big problem," he said.

Mr Kortze said he understood the 10 percent requested increase from the school

board last year due to the additions to two schools. However, this year's big

jump confuses him.

"I would like to sit down with the Board of Education and have further

discussions on the budget," he said.

Impending Cuts

In order for the Legislative Council to maintain the tax rate increase at an

inflationary level, a total of $1.6 million will need to be cut.

The council's finance committee is adamantly against using its entire surplus

to keep costs down. That means budgets must be trimmed.

"We had a $2 million surplus and we used it all last year," noted committee

member Melissa Pilchard. "This year our surplus is even larger, $3 million,

but we simply can not base our government on that being there every year.

We're raising the bar every time we use our surplus to offset taxes."

As for Newtown's sixth-place ranking for indebtedness, that number may be

somewhat deceiving since the town does not have an industrial base to offset

it.

"There are two sides to the coin. We have high debt per capita, but we have

the demographics to support it. What does that mean? The only thing you can

say is that the statistic is a true statistic," Mr Kortze said. "Where is the

breaking point? We don't know, but don't want to approach it."

Newtown ranks 47th in per capita income, according to the state's Office of

Policy & Management (OPM).