Council Looks For A One Percent Solution On The Budget

By John Voket

The Legislative Council Voted 10-2 Wednesday evening to reduce the amount of a second-round budget proposal by one percent, which will shave $1,066,259 from the 2011–12 spending plan.

The resolution, which was opposed by Councilmen Richard Woycik and Robert Merola, also represents a new tactic for the council, in that it sends the reduction mandate back to the Boards of Selectmen and Education to achieve in a collaborative fashion, instead of the council deliberating and settling on any reductions immediately following the proposed budget’s first-round failure the night before.

On April 26, the initial spending plan failed by 266 votes in referendum voting, with about 20 percent of qualified taxpayers turning out to the polls. (See separate story.)

The council budget resolution came with some flexible guidelines permitting the two boards to return with more than a one-percent reduction, and for them to determine the exact percentage of reduction each department will bear. But the resolution also delivered a strict mandate, described by many officials on hand as an extension of taxpayers’ orders via the vote, to make cuts in expenses versus achieving reductions through anticipated or “found” revenue.

During the early part of the special joint meeting with members of the Board of Finance, those officials each in turn expressed their thoughts about how the process of crafting a second-round proposal that would pass should play out.

Finance board chairman John Kortze said he discussed an idea with a number of council members earlier in the day about taking the little time available to send the spending plan back to selectmen and the school board to discuss and assemble the means to meet the reduction amount in the council’s eventual resolution.

If the two boards were to return to taxpayers with an approximate 70/30 percent split in reductions, the town side proposal would shrink by about $320,000 with the school district giving up slightly less than $736,000.

In explaining her initial motion, council Vice Chair Mary Ann Jacob said the split should be 70/30 instead of 60/40 because 100 percent of the debt service, which is primarily designated to school district capital projects, is carried on the town side of the budget.

If the proposed reductions are approved by voters in a second referendum, tentatively set for May 17, the failed first round budget increase of 2.67 percent will be shaved to 1.25 percent, raising the current 24.00 mill rate to 24.38 as of July 1, 2011.

Finance board comments began with Vice-Chair James Gaston who insisted any reductions be achieved without going back on a commitment to stop the use of municipal fund balance to offset taxation. He then urged officials to reach their eventual reduction request with a fine chisel instead of a sledge hammer.

Martin Gersten said he liked the idea of the council crafting a net reduction figure and then turning the task back to the selectmen and school board to deliver the reductions, also urging officials to take a serious look at savings he believes can be achieved by merging or closing some school facilities.

Harrison Waterbury called the failed vote “significant,” adding that cutting “a small amount is not the right thing to do — it’s not what the people want.”

Joseph Kearney suggested the council fix a reduction to the school district at $830,000 and a $125,000 reduction to the town as a starting point for deliberation. Michael Portnoy, who was out of state, sent an email which Mr Kortze summarized saying, “the voters spoke loud and clear,” and adding that Mr Portnoy maintained his support for a zero overall budget increase, or even a decrease if it could be achieved through “structural” changes in staffing, benefits, and overhead costs.

In closing out the finance board segment of the meeting, Mr Kortze said the no vote should not be marginalized by school and town leaders.

“This was billed as a ‘same services’ budget and it did not pass,” he said, adding “the taxpayers demand less services. The reduction should be sizeable.”

Following Ms Jacob’s motion to reduce the overall spending plan by one percent, Mr Woycik countered that he did not think that was enough and requested a “reasonable compromise” between the reduction on the table and a zero increase. He then called to amend the motion to cut $1.125 million to the school district and $300,000 to the town.

Councilman and finance committee Chairman Ben Spragg then said the council not only owed it to the voters to craft an acceptable reduction, but to show how that reduction was achieved.

This brought his friendly amendment to build such a directive into the resolution, along with the flexibility for the town and school officials to come back with a greater that one percent reduction, and the request for the school and town boards to collaborate on the exact percentage each would cut from the second-round proposal.

Councilman Merola then suggested the percentage should reflect the four-to-one increase in the school request versus the town side, or an 80/20 guideline. Councilman Kevin Fitzgerald said he would rather see the reduction put the second-round increase at about 1.99 percent, which would equal about a $675,000 reduction overall.

Council representative Kathryn Fetchick said the voters rejected a same services budget, and agreed the selectmen and school officials must return with explanations of the services that would be cut to achieve the necessary reductions.

“If we cut money, we should know how it is going to affect everyone in town — provide ultimate clarity,” she said. “We need to make structural changes.”

Councilman Dan Amaral said he wanted to see a reduction that would only increase the mill rate from 24.0 to 24.1 or 24.2. A mill represents one dollar for every $1,000 in taxable property. Councilman James Belden said he thought the town side could give up about $330,000 in reductions and that Ms Jacob’s motion was more favorable than Mr Woycik’s suggested amendment.

Councilman Gary Davis then said he would like to see the resolution amended to state the reductions in the second-round budget proposal should represent the first step of a long-term program to review the entire town’s process of doing business, and to insist state legislators help Newtown and other Connecticut municipalities reduce future budgets by finding other ways to raise revenue besides through property taxes.

First Selectman Pat Llodra said she understands that any cuts on the town side will likely be structural in nature, and that the town will be challenged to deliver the same services with fewer resources.

School board Chair William Hart said he took the suggestions about structural changes seriously.

“We can’t do budget reductions with gimmicks,” Mr Hart said, adding that it will mean “taking people out.”

Mr Hart also acknowledged that he has “a board that wants to maintain independence about budget decisions.”

Moving the questions, Council Chairman Jeff Capeci said that the voters had spoken and “the price tag was too high.”

The Woycik amendment failed 9–3 with Mr Merola’s subsequent amendment on the change to an 80/20 split failing 9–3 as well. In both cases Mr Merola, Mr Woycik and Mr Amaral voted in unison.

Following the vote, Mr Spragg clarified that the end result if approved by taxpayers in the next referendum would be a 1.25 percent increase in the budget and a 1.5 percent increase in taxation. The difference represents the $1 million in previous fund balance revenue that will from this year on be raised through taxation.