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05/16/2016 08:59 AMWith an eye toward state budget shortfalls, Branford’s Representative Town Meeting (RTM) voted May 10 to adopt a re-tooled 2016-17 town expenditure budget reduced by some $300,000 to offset potential revenue losses.
The vote, carried the Republican-led RTM majority, adopts a budget with a $105.89 million bottom line similar to that recommended by the Board of Finance (BOF) in March. As it stands, the RTM-approved budget has a mill rate increase of 1.49 percent over last year; but the final mill rate number is not yet set. The BOF sets the revenue-generating mill rate and still has time to pivot a bit, should more adjustments be needed, said First Selectman James B. Cosgrove. The BOF votes May 23 to set the new mill rate.
“Once we set our mill rate and send out tax bills in June, we don’t have opportunity to say to our tax payers, ‘Here’s a supplemental tax bill.’ So that’s where you can run into a deficit,” Cosgrove told The Sound. “So that’s where the Board of Finance will consider to dial back those anticipated revenues. Once they have the expenditure side, which is set by the RTM, then the Board of Finance will also possibly reconsider the anticipated revenue side of the equation; then they can set the mill rate. It’s currently at 1.49 percent (increase). My goal has to been to keep the tax rate at two percent or below going into this process.”
As of now, based on the RTM’s May 10 budget approval, the new mill rate that will be considered by the BOF May 23 is 27.33 mills (the current rate is 26.93 mills). The new fiscal year begins July 1, 2016 and ends June 30, 2017.
The state’s painful budget process has created one of the town’s most unusual budget seasons, causing the BOF to keep the budget at the forefront even after the board completed its lengthy vetting process in March. But, as Branford Finance Director James Finch said at the BOF meeting on May 2, “...extraordinary times call for extraordinary measures.”
Cosgrove said Gov. Dannel Malloy sent the town his revisions to the state’s proposed budget in April and it included cuts that reduced Branford’s anticipated state revenues from $1.3 million down to $800,000. The state money is earmarked for education and property tax relief.
“Branford historically has taken a conservative posture in budgeting revenues, whether its monies from the state or other sources (and) we build those into the budget at the very beginning,” Cosgrove said. “So we rely on what the state has told us, but we do take a conservative posture. When the governor put out his proposal, it wiped out a lot of what we were planning.”
The governor’s proposed cut, combined with the experience of not receiving $170,000 in anticipated state revenue this year, gave Cosgrove cause for “concern,” he said.
“Even though it was his proposal, and it still had to go through the legislature; from comments I’ve heard and from talking to Jim Finch, I decided...even if the state legislature restores some of those monies, there’s still no guarantee we’re going to receive it,” said Cosgrove.
On May 13, the state budget proposal was passed by the legislature; it heads back to the governor for a final sign off this week.
Finch said Cosgrove’s concern is valid, noting the town experienced a mid-year drop in revenues of approximately $170,000 in the current year (fiscal year 2016) due to the state pulling back that amount from the town when finding funding to address a state budget gap of $230 million.
“Additionally, in the second year of the state’s proposed biennium budget (fiscal year 2017) we anticipate a reduction of $505,000 as the state grapples with a $960 million shortfall,” said Finch. “Despite the state’s best intentions, we believe it is naïve to think we will be spared from future cuts given the severe fiscal challenges in Hartford.”
Ahead of the May 10 RTM vote, Cosgrove reached out to leaders of the Republican and Democratic sides of the RTM; while “...recognizing they’ve already gone through their committees,” Cosgrove asked of both sides, “... let’s see where we can make some adjustments,” said Cosgrove. The Republican caucus came to the table with the proposed cuts voted in by the RTM May 10.
“It is important to note that the fiscal condition of the state weighed heavily on the decisions made by the RTM,” said Finch. “As we noted at the Board of Finance meeting on May 2, the problem that concerns us is the outlook for (fiscal year) 2018; where the state shortfall is projected to be in the neighborhood of two billion dollars. While we are not overly reliant on state assistance; we are considering whether to dial down the amount we are estimating for state aid in 2017 to smooth the potential drop in 2018. The budget reductions approved by the RTM will offset some of the impact of potential revenue reductions.”
On May 10, the RTM voted to take $292,302 in reductions from the proposed $106,183,523 budget forwarded by the BOF in March. The RTM kept the Board of Education’s (BOE) operating budget intact at $54,249,899 but dropped school capital and leases (originally $515,000) by $42,865. The RTM reduced town government budget expenditures by shaving $249,441 off the BOF’s originally-recommended total of $51,418,624. Of that town government budget savings, $138,941 was found by making adjustments to capital spending while $110,500 came from operating expenses.
Overall, the RTM adjusted the budget by looking at 20 different areas of expenditure and capital expenses, from school capital and leases to town public celebration expenses and costs for new police cruisers. Nineteen line items were reduced, each by a percentage allowing requests to remain intact with less funding. For example, Public Celebration expenditures were reduced by $5,000 (from $26,079 to $21,079) and a request to fund fleet rotation of four new police cruisers ($121,552) was reduced to funding three ($91,164). A complete schedule of all of the changes approved by the RTM May 10 appears with this story at www.zip06.com