During its regular meeting April 5, the Legislative Council put the finishing touches on a 2017-18 spending request that will go before voters in the annual budget referendum Tuesday, April 25.

After two additional minor reductions, the council unanimously endorsed a proposed spending plan that, if approved, will fund a municipal budget request of $40,399,575, representing a three-tenths of a percent (-0.3 percent) reduction from the current year, and a $72,995,957 school district request representing a nine-tenths of a percent (-0.9 percent) reduction from the current year.

(The municipal budget carries all debt service for capital project bonding including all school district projects.)

The total budget request for the 2017-18 fiscal year, if approved, will be $113,395,532, representing a seven-tenths of a percent (-0.7 percent) reduction from the current year that would generate a mill rate of 33.87 - an increase of 0.82 percent. A mill represents one dollar for every $1,000 in taxable property.

Budget polls will be open April 25 at the Newtown Middle School from 6 am to 8 pm. Absentee ballots are expected to be available by Monday, April 10, at the Town Clerk's Office in the Newtown Municipal Center at Fairfield Hills.

As in past years, budget voters will be asked to endorse or reject the municipal and education budget requests separately on a split ballot. As a result of a 2016 Charter Revision that eliminated the town meeting for authorizing capital spending, voters will be responsible for individually accepting or rejecting a half-dozen capital authorizations on the ballot.

While that charter revision increased the amount that the council could approve for each project up to $1.5 million, it also capped the total amount of capital spending the council could authorize. Since the council can only approve a total of 1 mill, or roughly $3 million in capital projects - any remaining requests also go to taxpayers at referendum.

After previous deliberation and a special appropriation process that involved review by the Boards of Selectmen and Finance, the council authorized moving a $1.8 million request for middle school improvements and a $3 million request for a new senior center to the ballot, along with a $750,000 request for the final phase of high school auditorium improvements; $850,000 for the Hawley School's roof replacement; $1 million for capital road spending; and a $300,000 request to begin the design phase for a new police headquarters to voters for consideration.

By a random drawing that occurred April 3 at the Board of Selectmen's meeting, the order of those spending measures on the budget ballot will be:

Item #1 - Hawley roof replacement

Item #2 - middle school improvements

Item #3 - senior center design and construction

Item #4 - road repairs

Item #5 - police headquarters design

Item #6 - high school auditorium

Confusion And Unknowns

This year's budget process was unique in that officials early-on were hobbled in their ability to address concrete revenue projections. This was because of a proposed state budget that could, if approved as proposed by Governor Dannel Malloy, hit Newtown taxpayers with as much as $7 million in added taxation.

Unfortunately, the full impact of any state budget actions will not be known for weeks after Newtown's local budget vote, and perhaps long after the end of the 2016-17 fiscal cycle if the legislature forces state budget action into a special session this summer.

Since the governor's budget proposal was announced, First Selectman Pat Llodra and Superintendent of Schools Joseph V. Erardi, Jr, have worked with state lawmakers and local officials to estimate the liability state mandates and local grant reductions might realistically shift onto Newtown taxpayers. Local officials have agreed and proceeded through the remainder of the local budget process under the assumption that Newtown's net loss in state aid would equal about $3 million.

The tightrope walk to Wednesday's final council action involved either endorsing a local budget request that, if and when endorsed, could underfund the local spending plan resulting in further operating reductions in process, a supplemental tax bill, or some combination of the two - or a level of taxation that could result in a budget surplus, in effect overtaxing local property owners.

Then add the confusing element of a combination of budgets that, if approved, result in a 0.7 percent spending plan reduction and a slight mill rate increase.

Two of the biggest factors, or threats, to putting forth an accurate assessment of local spending to be funded through taxation involve the school district.

While it is not expected to happen in next year's state budget, a plan to shift one-third of payments to the state teacher pension plan to towns could still pass. The immediate effect would be a mandate to pay about $3.9 million into the state teacher pension plan next year.

The other confounding issue is a change to the Education Cost Sharing formula or ECS payments that would, if approved, create a new formula and a breakout grant specifically to help underwrite local special education services. In anticipation of an approved special education grant of a little over $1 million that would go directly to the school district if approved, school leaders and the council collaborated and agreed to reduce the district budget request by a corresponding amount.

In the event that grant is modified or eliminated at the state level before the 2017 state budget is ratified, the council deliberated and agreed, on April 5, to craft a resolution that would in part make the school district's budget whole. The resolution affirms that the council's reductions might not have otherwise been made if it was not for the uncertainties in the governor's proposal. It also recognizes that the final local spending plan could deliver more taxpayer funding than is required to underwrite the budget they approved.

During other budget cycles, nominal budget surpluses have occurred and have been swept into the general fund as unanticipated revenues. But since local officials had to make extraordinary reductions anticipating a $3 million shortfall, and have taken provisional steps to reduce the school budget in anticipation of a special ed grant that is still under deliberation in Hartford, the council decided to make a formal move to assure taxpayers that in the event they are overtaxed, certain expenses that were cut would be reinstituted in the 2017-18 fiscal cycle.

Those reductions that would be reinstated and considered for partial or complete funding depending on the amount of surplus taxation include:

*Contributions to the local municipal pension fund totaling up to $188,030

*Contributions to the local Medical Self Insurance Fund of $236,630

*$250,000 from the Capital Roads maintenance budget

*$272,000 from the school maintenance budget, which were determined to not affect the safety and/or security of students or staff

Increases Versus Reductions

In anticipation of questions that might come from taxpayers about the reduction in spending and the increase in the mill rate if the current spending local plan is approved, Town Finance Director Robert Tait presented the council with explanations to respond to constituents.

Anyone questioning why taxation is increasing $2,163,000 while the budget request has decreased by $687,000, should understand that other revenues that help offset taxation to fund the annual spending plan have decreased by $2,850,000. That results in a need to fund a budget increase of $2,163,000 from taxation.

That 2.1 percent spending increase is only generating a 0.91 percent tax increase of $918,000, because the finance director is applying a grand list increase of $1,440,000, and an anticipated increase in local tax collections of $195,000 to offset the difference.

Between the $907,000 in new grand list revenue, finance board reductions of $579,000, and council actions resulting in $1.5 million further reductions, the proposed budget going before taxpayers anticipates absorbing the anticipated $3 million in state intergovernmental revenues without having to pass that liability on to taxpayers.

During final deliberations, council representatives Chris Eide and Judit DeStefano supported returning the $1 million reduction to the school district budget, but that motion failed. The pair also attempted to make a case for sending a budget forward to taxpayers including the expenditures that were removed, and setting the mill rate once the state budget is finalized, but there was minimal support for that among their colleagues as well.

Before the final budget vote, the council did agree to two further nominal reductions: $25,000 which represents savings over the projected town liability insurance premium, and $75,000 from the capital nonrecurring contribution. Mr Tait explained that the $75,000 would be made up in next year's capital nonrecurring contribution through a transfer from the current year's contingency surplus.