Anatomy Of A Budget Process – By The Numbers

By John Voket

For the fifth time this year, taxpayers are called to Newtown Middle School to endorse or reject the latest spending plan. That proposal requests $106,246,838, representing an overall tax increase of 0.69 percent. Breaking from tradition, the next referendum is set for Thursday, July 12 from 6 am to 8 pm.

Typically, budget votes have been held on Tuesdays. But officials are hoping that an endorsement July 12 will provide enough time to issue accurate tax bills and have them in taxpayer mailboxes before August 1.

The town’s vendor that processes and mails tax bills has indicated there would be insufficient time to make that August 1 deadline if a referendum passage occurs any later.

Taxpayers who cannot make it to the polls July 12 are welcome to cast absentee ballots which are available until closing time July 11 through the Town Clerk’s Office. Town Clerk Debbie Aurelia is again holding a special weekend absentee voting session Saturday, July 7 from 9 am to noon.

While the past few years have seen the annual budget vote go to a second or even a third referendum, 2012 marks the first time in recent history that rejection has occurred at least four times. Opinions about why this year’s budget process has been so circuitous are varied, but as in at least one previous year, two no vote camps have surfaced – one demanding a flat spending plan and another demanding funds be restored to the education request.

There are a number of other factors, however, that are unique to the 2012 budget process going back to the original proposals tendered by the Boards of Selectmen and Education. As the two requests moved into the Board of Finance’s and Legislative Council’s arenas, some officials were quick to point out how meticulously the town-side spending plan was illustrated versus the proposal offered by the school district, which was criticized for lacking detail.

This year’s increase request from the school district also reflected more reductions taken at the school board level than in recent years, before being sent through the finance / council vetting process. School board actions ahead of its endorsement of the initial budget request reduced the administrators’ spending plan by $1.7 million.

The district’s budget request was then subsequently reduced another $700,000 by the finance board.

The council, following recommendations of various sub-committees each assigned to review specific areas of the overall budget proposal, made no further cuts to either spending plan before sending it and the town’s budget request to the first referendum April 24.

Referedum #1

Had the April 24 budget proposal passed, it would have generated a 2.34 percent tax increase tied to $107,406,523 in expenditures, while requiring $107,806,523 in revenue. The $400,000 difference would have been applied to the town’s fund balance, bringing it up to 8.0 percent on July 1, 2012 — one full year ahead of plan.

The recommended town-side request in the first-round vote stood at $27,980,942, representing a 0.43 percent increase over the current year. The school district’s request was $69,355,794 — a 2.04 percent increase over the current year.

That initial budget referendum April 24 saw a historically high number of no votes – 607 – rejecting that first-round request. On that day 2,569 No votes were cast versus 1,962 Yes.

The next evening, the council approved a $1 million reduction to the school district’s proposal, setting up a second-round referendum that requested $106,806,523 in revenue, but otherwise leaving the town-side and fund balance infusion untouched.

Referendum #2

In an attempt to clarify details of the second-round request ahead of a May 15 referendum, a panel of town officials held an unprecedented budget forum moderated by Newtown Bee Editor Curtiss Clark. Both audio and video transcripts of that session were broadcast, and additional follow-up questions were also posed and answered in The Bee that week.

Although a number of taxpayers who previously voted no may have been satisfied that the second-round request was acceptable, the May 15 vote nonetheless failed by 77 with 2,023 No votes cast versus 1,946 who endorsed the proposal. Had it passed, the May 15 referendum would have resulted in 1.28 percent increase over the current budget generating a mill rate 24.6 mills.

A mill equals one dollar for every $1,000 in taxable property.

Referendum #3

After about two hours of deliberation and numerous amendment attempts, the Legislative Council on May 16 returned to its original motion and unanimously approved reducing a fund balance infusion by $200,000. The move put a new request of $106,606,523 to a third-round referendum that would, if approved, increase taxes by 1.07 percent.

Because of a charter stipulation that a third budget after two failures must go to a town meeting, selectmen met May 21 to set a date for that town meeting, and anticipating the town meeting would be petitioned to an eventual third machine vote, the board voted to change the call of that town meeting to send the third proposal to a referendum June 5.

But it was not meant to be. The  third-round referendum registered 2,226 No votes outpacing the 2,112 Yes votes by a margin of 114.

Referendum #4

Before the council met following the third-round budget failure, Mrs Llodra, along with finance board Chair John Kortze and Finance Director Robert Tait, crafted a proposal that would nearly close out unassigned funds in a capital nonrecurring account. That action provided the council an added $240,000 to distribute between the school district and town.

The added funding was intended to offset capital expenditures in the respective 2012-13 budget requests, freeing up those allocations in the school budget request to apply to operations or programs. The proposal, as presented, drew down the town-side budget request to a zero percent increase, further lowering taxation and leaving the municipal side of the budget with roughly the same amount of funding provided in 2008.

While the presentation and discussion around how to distribute the funds proceeded for nearly two hours, with several attempted amendments and withdrawing of motions, the following actions were approved:

*Reduce the Selectmen’s budget request by $119,685 – passed unanimously.

*Permit the Board of Education to use $200,000, and the Selectmen to use $40,000 from the capital nonrecurring fund – passed 8-3.

*Further reduce the selectmen’s budget request by $40,000 to be supplanted by the capital nonrecurring funds – passed unanimously.

That series of actions resulted in a motion to send a $106,446,838 budget request back to voters Tuesday, June 26. If approved, the request would reduce a tax increase to 0.9 percent, while maintaining a commitment to infuse the town’s fund balance with $200,000.

But the proposal failed by 19 votes – posting 2,089 Yes votes versus 2,108 taxpayers who rejected the request.

Following the fourth-round rejection, the council reduced taxation by an additional $200,000 while refusing to reduce either the town or school requests further. The $200,000 in reductions will come from the town’s proposed fund balance and contingency fund.

If approved, the fifth-round budget being presented to taxpayers July 12 will generate $106,246,838 in revenue and will expend $106,146,838 — accounting for the $100,000 fund balance infusion.