Good News And Bad News

To the Editor:

It was the best news and the worst news I heard this week. Our town has a significant surplus going into the last month of the budget year. Hooray! Over $700,000 hitting our fund balance in 2011–2012. Surely this was a huge surprise to everyone, and now we’ll be able to get back to something close to a same services budget for education, right? We still may not be able to fund full-day kindergarten but this is a huge help, yes. What a great surprise and relief for everyone. These were the thoughts that raced through my mind upon hearing the news.

Of course, not everyone had been surprised. I later learned, the $700,000+ was a result of two actions that occurred in February 2012. One, a refinance of existing debt, the other a bond premium of approximately $370,000 paid to the town. The refinance actually netted the town approximately $1.6 million in savings; $375,000 in savings from payments this year (2011–12) that were reduced as a result of the refinancing. As I understand it, the transactions settled officially some time in March.

Yes, March. This brings me to the worst news. The transactions closed in March. Does this mean that this information was actually considered when it was decided, after the first failed referendum, to reduce education by $1 million, leaving the municipal budget and the $400,000 addition to the fund balance intact? When Legislative Council members voted to leave that $400,000 in the budget for the fund balance, did they understand that they were taking action that put the fund balance significantly ahead of plan (to get us to eight percent in 2013–14), while reducing education to an amount far below a same service budget? Probably not, but maybe.

There was quite a bit of chatter over the weekend about this, and several officials tried to explain the numbers. Almost none of them had it right. Some said that they thought the $1.6 million was spread out over 20 years. The reality is that this is very complicated. I don’t pretend to understand how this is all calculated, but I can read a spreadsheet with columns labeled “Change in Fund Balance” and “Percent of Budget.” I sought guidance from our town finance department to confirm the figures.

As for the balance of the $1.6 million, the information I have shows that roughly $850,000 and $375,000 will go to debt service 2012–13 and 2013–14, respectively, with much smaller amounts (most less than $10,000) most like going to debt service over the next 12 years.

I don’t understand why our officials, when faced with making such serious and difficult decisions, chose to arbitrarily cut $1 million from our school budget before doing their homework.

Nobody is perfect. It’s not the mistake, but the action you take once you realize it. I will again vote No, giving the Legislative Council the opportunity to restore funds to education.

Michele Assante

Wendover Road, Newtown                                                May 30, 2012