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Redding
Town budget: Board’s cuts total $450,000
May 8, 2008
by Susan Wolf
pilot@thereddingpilot.com
The town budget was reduced by $450,000 Tuesday night following taxpayers’ rejection of the proposed budget by 101 votes — 824 Yes to 925 No.
The revised budget proposal of $43.2 million is 3.17% higher than the current budget and would bring a projected 20.87 mill rate, a reduction of 1.87 mills from the current 22.74 mill rate.
The finance board met for more than two hours before making its decision to reduce the town budget by 1%, or the $450,000. This includes a $125,000 reduction in the Redding school budget for the lower schools and a $75,000 reduction in the town budget. The $750,000 originally proposed to restore the town’s fund balance, or savings account, was reduced by $200,000.
Included in the vote is the minimum $50,000 the finance board is asking the Region 9 school board to reduce from Redding’s share of its budget, even though the local finance board acknowledges that it has no control over the Region 9 budget for Joel Barlow High School. Should the Region 9 board reduce its budget so Redding’s share is even lower, more money would be restored to the fund balance; if it is less, the amount going into the fund balance would be reduced.
Member Frank De Salvo recommended considering the Region 9 reduction since that board’s budget also failed at Tuesday’s vote, forcing another look. The town’s share of the budget is determined by the number of its students in the school.
The finance board went through a number of iterations before arriving at its reductions to the various components of the budget.
The finance board’s 5-to-1 vote in favor of the budget reduction followed debate on how much and where reduction should be taken. Member Albert Viscio was the lone dissenter. He said that while the cut “is seemingly deep, it is relatively small.” He favored a “modest” set of cuts first, and then if the budget failed again, “we’d be talking slash and burn.”
In an earlier presentation to the board, Mr. Viscio said the bulk of the increase in the tax rate — in the mid-teens depending on the property owner’s new assessment due to revaluation — is not because of expenditures.
Rather, the increases have resulted because of the $22 million in adjustments to the prior grand list, the inventory of all property in town at its assessed value, which resulted in lower tax collections. Another factor is the shortfall in anticipated revenue. On top of that, there have been no increases in the tax rate for the last three years. The end result has been a major reduction in the town’s fund balance, expected to be at around $200,000 by the end of the current fiscal year. The finance board wants to restore the fund balance to 2% of budget operations over the next three years.
The town benefit, or tax credit, for the elderly has also added to the current budget because it accounts for more than a $1-million adjustment on the grand list.
Proportional
Bill Alvarez, finance board chairman, was steadfast in his belief that the board had to make a substantial cut and that it should be proportional between the town and the Redding school budget. He initially said a “meaningful cut” would be $500,000, or about 1% of the originally proposed budget.
To get to a single-digit tax increase, he later said, “would be like getting rid of the fifth grade” in terms of the impact it would have.
Member Nick Simeonidis pointed to the “relatively narrow loss” on the town budget, given the proposal for a double-digit tax increase. “We should be careful not to overreact,” he said.
Fund balance
Among the items the board considered were various reductions in the money designated to help restore the fund balance. While Mr. Alvarez and several others were willing to consider a reduction, but nothing above $250,000, leaving $500,000 intact, member Christine Kearney was adamantly opposed to any change. Mr. Viscio said he would be uncomfortable with reducing the $750,000. Mr. De Salvo favored a larger reduction in the school budget and leaving the fund balance restoration money as is.
Town Treasurer Peg O’Donnell said the board should remain mindful that the medical health reserve in the Redding school budget has already been reduced. If there are a large number of medical claims, the town would be looking to its fund balance to deal with this. “We need to repair the fund balance,” she said.
School budget
The board also parted ways over how much should be taken from the Redding school budget. While Mr. Simeonidis initially favored nothing more than $100,000, member Joe Dolan said he’d prefer to take the larger slice from the town side of the budget.
It was not an idea that was acceptable to Mr. Alvarez, who said the town’s share of the overall budget is one-third, with the school budgets accounting for the rest. “I think we should share it proportionally,” he said, “and the town budget is already negative to begin with. We can’t ask for a bigger cut from them than the schools.”
During public comment portions of the meeting, the board was asked to leave the school budget alone. Lewis Goldberg, Redding school board member, said cutting $100,000 from the school budget “is talking programs and teachers ... We’re not talking about administrators or a new roof,” he said, but about teachers and areas affecting pupils.
Mr. Goldberg said when he thought an even larger cut might be considered, $200,000, for example, he feared people would vote No. “You may alienate people, and I may be a leader of them,” he said.
He asked the finance board to give his board a chance to garner support for the school budget with no cut or only a minor cut. Cutting $100,000 in the school budget would amount to less than one-half of 1%, said Mr. Alvarez. He said he did not think the board should cut nothing and send the budget back to voters. “We need a meaningful cut,” he reiterated.
“Any cut from this point would be painful, but cutting flesh is not as painful as cutting off an arm, resulting in more long-term damage,” said David Lewson, Redding school board chairman, about potential budget cuts.
Others called on the board to leave the school budget alone, and two said the finance board needs to better explain to voters why the proposed tax increase is so high.
Tax Collector Patricia Moisio said the town side of the budget is small compared to the Redding school budget and the town’s share of the Region 9 budget. She said the town budget “is as bare as possible,” and “we don’t have a group to support us.”
Elderly tax benefit
Mr. Dolan said he preferred to reduce the town tax benefit for the elderly, which increases by 32%, or $296,000, next fiscal year. The formula for the increase is driven by revaluation.
He said he was suggesting a reduction “at both ends of the scale” if the board was looking at cutting the school budget.
First Selectman Natalie Ketcham said the tax benefit is created by an ordinance. To change it, the ordinance would have to be revised, but no change could be enacted that would affect the benefit next fiscal year.
“I would urge my colleagues they ought to be careful not to pit one group in town against another,” said Mr. Simeonidis.
Before the vote on the $450,000 reduction in the budget, Mr. Alvarez said he had heard everyone’s comments about a lesser reduction, but he warned that if the board were to take just $250,000 from the budget, “the next time around it will probably be $1 million; $250,000 isn’t going to cut the mill rate.”
The Board of Selectmen is meeting on May 19 to set the next referendum date and to adjust its budget to reflect the $75,000 reduction. The Redding school board, which oversees the elementary and middle schools, will be meeting on May 13 to deal with its budget reduction. Region 9 is tentatively set to look at its budget on May 14.
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