This is a printer-friendly version of an article from Zip06.com.
02/20/2017 11:00 PMBudget season is in full swing and the state deficit is wreaking havoc on local municipalities’ budget processes. Of Connecticut’s 169 towns, 132 are facing significant proposed cutbacks. With the governor’s current proposed budget for the 2017-’18 fiscal year, North Haven would face a loss of $4,939,000 in state revenues, a figure that includes $1.8 million in cuts to education funding.
In addition to the cuts to state funding, the state is also now proposing municipalities pay one-third of teachers’ pensions that were previously funded by the state. North Haven’s contributions to teacher pensions would be $2.5 million.
“The total impact is a reduction of $7.4 million,” said First Selectman Mike Freda. “Prior to this news, I was anticipating no additional funding and with that, there would’ve been no tax increase.”
The Board of Selectmen is considering a spending increase of approximately 2.5 percent for the 2017-’18 budget year, and the Board of Education is requesting a 3.5 percent increase for the same period.
The unexpected reduction of $7.4 million in revenue to North Haven’s budget equates to 2.64 mills, which would have an annual impact of $500 on residents’ tax bills for an average household; the average value of homes in North Haven is $284,000, according to Freda.
The state budget proposed by Gov. Malloy is subject to review and a vote by the state legislature, and the numbers will not be final until the budget is approved at the state level, which won’t happen until after North Haven’s budget referendum. Due to that uncertainty about state funding to local municipalities, Freda and town leaders are currently working on how to best put together a budget with numbers that may change at the state level.
“What we’re contending with is, what number do we budget for?” said Freda. “We don’t know what that outcome is going to be. We are trying to determine whether we put the $7.4 million as a loss in or estimate what losses could be. We’re not sure what direction we’re going and waiting on clearer communication from the state on options.”
Freda has also recently attended two statewide mayors’ conferences at which state leaders discussed the effect of the cuts and options for mitigating those impacts. Freda also noted that the town has been preparing to deal with the deficit at the state level. “All year long we’ve been saving money by not spending on certain line items,” said Freda. “We fully anticipated to have a surplus this year as an additional cushion, knowing the state was having the problems it was having, but we didn’t realize it would be this drastic.”
Freda and North Haven department heads are currently examining their budgets and will build a budget to present at a Tuesday, April 4 public hearing. “For all of us, not just North Haven, this is the most difficult budget we’ve ever had to put together because of the state being $1.5 billion in deficit,” said Freda. “It seems when you run a good financial government—North Haven, Branford, Guilford, Madison, Trumbull, Wallingford, and many others—we’re the ones who are losing most of the money.
“The question is, what numbers do we plug in? Do we plug in for the worst-case scenario, which changes the goal of no tax increase?” asks Freda. “I’m not the type to do anything other than find solutions versus complaining. I don’t complain, I search for solutions.”