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02/20/2017 11:00 PMAt the Board of Selectmen meeting of Feb. 14, First Selectman Carl Fortuna, Jr., told the selectmen the combined budget proposed for town government, schools, and for debt service payments would increase overall spending by 1.9 percent. At a time when Governor Dannel Malloy’s proposed budget further cuts town aid, the budget the Board of Finance will review starting March 1 assumes an additional $200,000 in state aid cuts.
Over the last two years, the town has absorbed large mid-year cuts in state aid the town had budgeted and projected to receive, specifically in Education Cost Sharing (ECS) grants. These grants are awarded to towns based on a state formula that reflects relative wealth of towns as well as each town’s student enrollment; school districts identified as “priority districts” by the state, those with greater poverty rates and lower performing schools, receive an extra bump in funding under the formula. The mid-year aid cuts that most school districts in Connecticut faced were tied to state budget deficits arising from state tax revenues falling below projections.
During this spring’s 2017 State Legislative Session, legislators face even larger state budget deficits and a proposed budget from Malloy that would push more of the state’s costs onto local taxpayers. In addition, the governor and legislators must struggle to respond to a 2016 court ruling that the state’s mechanism for distributing local education aid is inequitable.
Despite this uncertainty from the state, towns are still obliged to develop budgets for the next fiscal year that starts on July 1, and so towns must make assumptions about the level of state aid to expect from all grant-in-aid programs and move forward.
For Old Saybrook’s combined town and school budget, Fortuna explained that he assumed that this current year’s final state aid amount of $525,000, after mid-year aid cuts were announced, could be cut by $200,000 more next year. In the budget he plans to deliver to the Board of Finance, Fortuna assumed the town would receive a total of only $375,000 in state aid.
“The bottom line is that we will have been cut nearly $1 million in state aid over the past two years. With this budget, we’re trying to get ahead of this,” said Fortuna. “The purpose of this budget is to give us a road map to a responsible budget, given expenditures and projected revenue. At this moment, this budget does not assume that the town will pay the governor’s recommended contribution to teachers’ retirement funding.”
Malloy’s proposed budget for the next two years assumes that more than 100 towns in Connecticut will pick up 30 percent of each town’s annual teacher retirement payment obligations.
The proposed 2017-’18 budget Fortuna will present to the Board of Finance for general government, Board of Education, and debt service is $45,265,900, a 1.9 percent increase over the 2016-2017 budget of $44,548,977.
“It’s still early [in the process]. We rely need to position ourselves for the future,” said Fortuna.
While the Board of Finance will begin its review in March, it’s not the first time the board has heard department budget presentations. In this budget cycle, the Board of Selectmen and Board of Finance met jointly several times before Fortuna and the Board of Selectmen finalized the proposed budget.