During a Legislative Council meeting March 23, Finance Director Robert Tait announced a recent budgetary windfall that, if applied, could reduce next year's currently proposed tax increase to 1.89 percent.

He explained that a $519,366 premium resulting from a recent $12 million bond sale could be applied to qualified capital purchases that would have otherwise been paid for through taxation and other revenues in next year's municipal budget.

Mr Tait told The Newtown Bee that the premium represents a difference between the stated interest rate on the bond and the actual market rate, and Newtown received the difference. Describing the premium as a marketing tool, Mr Tait said the town has seen such premiums before, however, the windfalls were always significantly less, and were typically applied to general fund revenues or the debt service fund.

The finance director told the council that any capital items the town and school could develop up to the amount of the premium, that exceed allocations in the current year's budget, can be taken out and purchased from the Capital and Nonrecurring Fund - thereby reducing next year's planned spending for those items.

Proposed reductions that have been developed so far include:

*$250,000 in highway road improvements

*$15,000 in highway capital expenses

*$25,000 in Parks & Recreation capital expenditures

*$25,000 in public building maintenance capital

*$35,000 in municipal technology purchases

*$100,000 in school district technology purchases

While officials will comb through the town and school budget requests to find other possible qualifying capital proposals, the $450,000 in capital expenses already identified, if applied to the 2016 proposed budget, would reduce the originally proposed 2.8 percent tax increase to 1.89 percent.

Council members will deliberate utilizing the premium as proposed, and will consider any of the currently proposed along with subsequently qualified capital purchases as they work to finalize a townwide budget request that will go before voters April 26.