At the April 3 Board of Selectmen meeting both First Selectman Pat Llodra and Selectman Herb Rosenthal offered statements about the final stages of the local budget development process.

Town officials were pressed to find the right funding formula this year after a proposed state budget was put forth by Governor Dannel Malloy that could, if approved, cost Newtown property owners 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, Mrs 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, and helped finalize local spending plans for next year under the assumption that Newtown's net loss in state aid would equal about $3 million.

The council then deliberated either endorsing a local budget request that, if and when endorsed, could underfund the local spending plan forcing 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.

Following discussion of a resolution produced by Legislative Council Chair Mary Ann Jacob, council officials voted to support the action recognizing that a state budget proposal could redistribute revenues related to Education Funding and other intergovernmental revenues; and that Newtown stands to lose a net of $3,814,563 in revenue. If that level of taxation produces any surplus once state revenues are clarified, Mrs Llodra proposed restoring funding in a prioritized manner to several specific reductions made to deliver referendum voters an overall spending request that accounts for that estimated $3.8 million shortfall.

Mr Rosenthal said he had serious concerns about decisions made by the council, both with regard to the general government budget request unanimously approved by the Board of Selectmen, and the budget as a whole.

"From my reading of the article in The Newtown Bee, it appears that the way the council wants to handle the uncertainty with regard to state revenue to Newtown is to reduce budgetary expenditures in both the general government and education budgets that will be submitted to the voters for approval and then later increase or decrease those items depending on the revenue ultimately approved for Newtown by the state legislature," Mr Rosenthal said, reading from a prepared memo that was entered into the record.

"Thus, the budget that the voters will be asked to approve will not be an honest budget due to a lack of transparency," he said.

Mr Rosenthal explained that in his view, the only budgetary power that is provided to the voters by the charter is the approval of expenditures, not the mill rate or local revenues, including local property taxes, but the very important ability to control spending.

"If the voters will be asked to approve artificially reduced budgetary expenditures which can later be increased by council appropriation of possible state revenue, then the voters will lose their ability to really control spending," he said. "Especially, considering that the items reduced were things such as pension and medical contributions plus maintenance items in the education budget and roads in the general government budget."

More Transparency

Mr Rosenthal said a much more transparent approach would be to present the voters with a spending plan that is required to fund the services that the public needs and deserves.

"It can be explained to voters that, unlike most years, the estimated mill rate necessary to fund those expenditures may not be as accurate as usual. In other words, the mill rate that will ultimately be set by the council will likely be either lower or higher than the one currently projected depending upon state revenues," he said. "However, the voters will determine what the town will spend in 2017-18. The charter does not have a time limit for setting the mill rate, so the LC should wait as long as they can - cash flow issues providing - until they have a better idea about the state budget."

Mr Rosenthal said he particularly objected to the reduction of $250,000 for Capital Roads and the very petty reduction of $10,000 for the Edmond Town Hall Board of Managers.

"With regard to the former, the Capital Road budget request was already $250,000 behind the plan set in place several years ago because last year the proposed $250,000 increase was removed from the operating budget and funded by the appropriation of revenue generated by a bond premium," he said. "Thus, this reduction will put us $500,000 behind which means a $750,000 increase for the fiscal 2018-19 budget in order to be on track. This LC action had less than 1/10 of a mill impact on taxes."

As for the Edmond Town Hall reduction, Mr Rosenthal noted that the first selectman had already significantly reduced the budget request presented by the Board of Managers, which selectmen approved and sent to the Board of Finance.

"This further reduction is almost mean spirited, because it will have no impact on the mill rate, but will impact the Board of Managers' efforts to maintain the building," he said. "We, the Board of Selectmen, should urge the Legislative Council to restore the Capital Road and Board of Managers' line items to our original request."

First Selectman's View

Mrs Llodra, in her memo, stated she supported the idea of council action to restore support for "critical" items or initiatives should the town find itself in the hoped-for circumstance of having revenue/resources that are beyond what is needed to fund the approved budget.

"As discussed at the March 29 council meeting, the specter of very impactful state budget actions has drawn us into reducing appropriations for purposes that lie at the core of sound fiscal management as in funding a modified pension plan and for prudent care of municipal assets as in roads and buildings," the first selectman stated from her own memo. "I know that under more normal circumstances these actions would not have been considered."

Mrs Llodra said restoring funds for capital road work lies at the top of her list if the council finds itself able to address some of the reductions.

"Roads are the one town asset that all residents share," she said. "Roads also serve our business community, and commercial/industrial facilities. The condition of roads is very present in the experience of all our residents and those who come here to work, shop, dine, or recreate. Good roads add to the quality of life for those we ask to pay the taxes we levy."

Second on Mrs Llodra's priority list was restoration of funds originally identified for maintenance at school buildings.

"To defer/delay these maintenance items is false economy that ends up a greater burden in a very short period of time," she wrote. "Third priority, then, is the pension. If funds become available I would want us to begin the three-year protocol to modify the pension plan and fund accordingly."

Mrs Llodra said her primary concern is that next year's council might again delay the implementation of the three-year protocol, "and we then are on that slippery slope of can kicking."

She said other priorities would fall into line behind these three items if any additional overfunded budget revenue remained.