Borrowing Plan Would Keep

Taxes Down In Coming Years

By Steve Bigham

The Town of Newtown is prepared to undertake an aggressive borrowing plan that will essentially double its indebtedness, but some town officials say it may not lead to the kind of sticker shock that some are fearing this coming budget season.

Last month, Legislative Council Chairman Pierre Rochman said he would be surprised to see the budget held down to a two-mill increase this year. Bonding for the proposed 5/6 school and Board of Education salary increases each represent a projected million dollar increase over last year’s budget. In addition, there are the costs associated with the purchase of Fairfield Hills, as well as the usual increase in operating costs for both the town and schools.

“Right now, we’re looking at a four to five mill increase, which, of course, is not acceptable. But I don’t think we can keep the increase anywhere near as low as we did last year if we are serious about Fairfield Hills and the 5/6 school,” Mr Rochman said earlier this month. “We’re doing things this year that we’ve never seen before. If we decide not to do the school or buy Fairfield Hills, I’m going to go for a zero mill increase, but I think people do want those things, and we have to pay the price.”

Newtown Finance Director Ben Spragg pointed out this week, however, that the numbers for this upcoming budget season may not be as bad as first thought. Moderate growth in the operating budget should be offset by significant increases in the grand list, he said. Add in a bonding package for Fairfield Hills and the 5/6 school, and taxpayers are only looking at a projected increase of about two mills. And for that increase, taxpayers will be getting a much-needed school and 185 acres of prime real estate.

First Selectman Herb Rosenthal reassured taxpayers there is no need to play “chicken little” this year. The sky is not falling, he said.

According to Tax Assessor Denise Hames, the town’s grand list growth should continue to increase by two percent each year for the next five years. Her figures prove that Newtown’s growth, which has forced the town to spend more, is also helping to offset these higher costs.

“In addition to this two percent growth, by the second year of projection, I feel that we could say that our grand list should show an additional increase of approximately $7 million due to Homesteads [at Newtown] nearing completion,” she explained.

By the fifth year, Mrs Hames said, the projection would still be showing a continued two percent increase, plus an additional $10 million. This increase would include new residential construction and possibly some development with regard to the Fairfield Hills property.

Current five-year Capital Improvement items that will require borrowing fall under two headings: Fairfield Hills and the 5/6 school. The Fairfield Hills portion includes purchase of the site ($5.5 million), demolition work ($3 million), municipal space needs ($5 million), ball fields ($2 million), Edmond Town Hall ($3.5 million), and police headquarters at Town Hall South ($2 million), for a total of $21 million. The 5/6 school is expected to cost the town $19.8 million after more than $10 million worth of state aid._ The two projects total $40.8 million, which, when added to the town’s existing borrowing, would balloon Newtown’s total indebtedness to nearly $80 million.

Mr Spragg, however, has crafted a three-year plan that calls for $14 million to be borrowed the first year, $12 million the second year, and $14.8 million the third year. This would cost the town one mill next year, 8/10 of a mill two years from now, and 1/10 of a mill the year after that.

“It’s an aggressive borrowing plan to do over that period of time,” said Mr Spragg. But one, he added, that can certainly be achieved.

“That’s sort of good news, but I’m not convinced that that’s all realistic,” Mr Rochman said this week, concerned that the picture for this year not be too “rosy.”

“I’d be pleasantly surprised if we could keep the budget at a two mill increase. We also have to be very careful that we don’t push off anything that is going to make the following couple of years unacceptable.”

Mr Rochman said the fact that Fairfield Hills remains up in the air makes the council’s job that much more difficult. Last year, it was criticized for putting money into the budget for Fairfield Hills. It will have to do the same again this year.

Of course, the economy always plays a big part in whether or not taxpayers are willing to accept a tax increase. Last year, with the economy still strong, taxpayers rejected an increase of over two mills. It remains to see what will come about this year. The economy does appear to be slowing down.

“The town has had a cushion of revenue the past few years. However, that luxury may no longer be there if the economy is slowing,” noted council member John Kortze, who chairs its finance committee.

As the economy slows, will people become more cautious in their spending? The 5/6 school is not considered to be optional anymore, town officials say. The crowded schools need relief. Fairfield Hills, however, remains an option and only time will tell whether the public wishes to exercise that option.