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06/02/2020 03:15 PMChester’s Board of Finance (BOF) adopted a $14,552,018 budget for fiscal year 2020–’21 (FY 21) that represents a $172,298 or 1.2 percent increase compared to current spending. The BOF also adopted a 28.62 tax rate, which represents a 0.17 mill or 0.06 percent decrease from the current fiscal year, though that move met with internal criticism.
The finance board approved the budget at a meeting held remotely on May 27 without going to a town meeting due to the COVID-19 pandemic in compliance with state regulations.
“We really looked at revenue very hard and made some adjustments based on what we thought might happen in this year’s budget based on the pandemic and then we went to the expenditures budget and we really sliced things as tightly as we could,” said First Selectman Lauren Gister.
The relatively low budget increase was accomplished largely through a 27.63 percent decrease in capital spending from $660,500 in the current fiscal year to $478,000 for FY 21. The town is using surplus funds from the current fiscal year to prefund capital items rather than returning the surplus as a fund balance.
The decrease in expenditures for FY 21 capital expenses will help offset increases in educational expenses. Chester will spend $10,072,536 on education in FY 21. This includes $4,964,446 for Chester Elementary School, an increase of 1.96 from the current fiscal year, and $5,108,090 to send students to John Winthrop Middle School and Valley Regional High School, an increase of 5.16 percent from the current fiscal year.
“So, the biggest thing on this budget is that the Board of Selectmen and Board of Finance set a goal of not having a tax increase for this year,” said Gister. “There was no way, really, without damaging our educational program to not have an increase in our school budgets for Chester Elementary School and Regional School District 4.”
Gister pointed to the economic implications of the pandemic at the state level and how it might affect the town, and taxpayers.
“We thought it might be a very difficult time for our residents and our taxpayers,” said Gister. “So, we tried very hard to, because we have a healthy rainy day fund, to not put anything in our budget that we didn’t absolutely have to do right now. I think the Board of Selectmen and BOF did a very good job trying to protect the taxpayer in this difficult time.”
Conflict Over Mill Rate
The mill rate reduction was ultimately approved, but not without lengthy discussion prompted by BOF member Richard Strauss.
Strauss said that the 28.62 mill rate would provide taxpayers with a savings of approximately $35, based on the town’s average home value and related assessed value.
“Thirty-five dollars doesn’t really go a long way,” said Strauss. “But it does further reduce our unassigned fund balance without a clear picture of the future impact of COVID over the next year to 18 months, which can provide additional risk to the town.”
He suggested that if the goal was to “provide relief [because of COVID] then it would be possible to further reduce the fund balance” for a full one-mill decrease, which “would actually provide homeowners with, or property owners, based on the average home value, of a $210 savings in taxes compared to what they are paying this year, which would be fairly significant.”
Strauss said he wasn’t proposing a one-mill decrease, which prompted BOF Chair Virginia Carmany to ask for clarity.
In response, Strauss said, “I’m asking if anybody would like to discuss the possibility of not having a 0.17 mill decrease, which would provide relief of about $35 and instead not reduce the mill rate—keep it the same and be able to have additional funds in reserve in the event that we have a worse situation next year and during, in ’21 and also following in ’22.”
Later, after further discussion among board members regarding the use of surplus to mitigate the unknown economic ramifications of COVID versus providing relief to taxpayers, Carmany expressed disappointment that the topic hadn’t come up at any of the prior budget workshops.
Board members expressed their recollections of past conversations at the workshops, with Carmany and Andrew Gardner expressing agreement with the sentiments of Richard Nygard.
“I think most folks on the finance board, at that point, believed that we had already cut pretty deeply,” Nygard said, “and while the 0.17 is only really a symbolic cut—as Richard says, $35 to the average taxpayer isn’t going to mean a whole lot—it is at least a symbol that we were trying to hold the line.
“I think we understood that we weren’t going to be giving substantial relief, but I think most of us at the meeting were comfortable with taking a little symbolic cut just to show that we tried to do as much as we could for the taxpayers at that point,” he added.
Later in the discussion, Selectman Thomas Englert asked Strauss to again clarify his point.
In response, Strauss said, “I don’t necessarily agree that, in the symbolic nature of a tax reduction. I think it looks more like a political maneuver. With all due respect, if you say you’re symbolic to someone who is in financial difficulty and we’re giving you, for the average home value, a $35 break, to them, that’s kind of a joke.”
The discussion continued, with different board members weighing in on the process and the precedent set by reducing the mill rate, while others discussed the precarious financial situation facing the town in the context of COVID-19.
Michael Joplin was the last to speak before the BOF voted unanimously to set the tax rate at 28.62.
“We can weather [a] 0.17 [decrease in the mill rate], but we have a rough road to go down here in the next year and it would be, I think, foolish to lower the tax rate any more than we have done,” said Joplin. “Because the future is just too uncertain.”