Taking The Long View

On School Spending

To the Editor:

First, I would like to thank the Board of Selectmen and the Legislative Council for voting to join CCJEF in an effort to make the State of Connecticut accountable for adequately funding education of our students in Newtown thus reducing the property tax burden.

Newtown currently has a low debt burden of 1.6 percent, an aggressive debt payout of 73 percent within ten years, a very healthy General Fund balance of $8.3 million and Capital and Non-recurring Expenditure Fund of $6.2 million, and a potential for significant increases in our tax base and per capita income. Moody’s weighs the increase in the tax base and the per capita income heavily in deciding whether a town can absorb the additional debt burden. Our tax base grew 48.6 percent in four years from 2000 to 2004 from $2.7 billion to $4.013 billion.

I have evaluated other towns that have recently bonded significant amounts to fund school construction and renovation: In 1999, Ridgefield approved spending $124 million. In 2001, Weston approved spending $73 million. In 2003, Fairfield approved spending $170 million.

I have reviewed the Moody’s rating history of these towns. Moody’s has been very forgiving and these towns did not even receive a negative outlook. I realize that one cannot directly compare these towns with Newtown, however, one can learn about which factors influence the ratings. Our financial leaders could explain to Moody’s that by increasing the debt burden for a short period of time now will in fact limit future borrowing. Long-term planning is necessary to limit future borrowing. Short-term planning will result in years of long-term future borrowing by putting off necessary capital improvement projects.

It will also be more costly for Newtown in the future as the percentage of state reimbursement for schools decrease as our tax base and per capita income increases. We received 40.36 percent from the state for the 1997 high school expansion and the preliminary numbers for 2006–2007 is 32.86 percent. Moody’s would also react positively if Newtown would quickly change the charter to create a reserve fund to provide for some flexibility and eliminate the low-bid process of obtaining bonds. Rather than just limiting our CIP to the ten percent (which is not mandated by Moody’s), there’s work to be done to fund the numerous necessary projects while sustaining the favorable outlook with Moody’s.

Voting to go forth with a high school expansion plan that does not adequately meet the needs of the students upon completion of the project will be a mistake. It is irrational to add 48,000 square feet when more than 51,303 square feet are necessary. Do we want to be reimbursed — 33 percent for building 48,000 square feet or do we want to be reimbursed for — 33 percent of building 345,859 square feet? There is a need to obtain more information. Option C may not be feasible if Planning and Zoning will not allow the material to be moved to the Oakview site. I realize the cost of construction has escalated however, the $160–$170 million estimate for a new high school was a rough estimate and it may not be accurate. We would benefit from obtaining some real numbers to fully assess the impact of the costs on our short-term and long-term CIP plan.

Po Murray

38 Charter Ridge Drive                                    November 22, 2005