The First Selectman's Corner
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There is still great uncertainty about what the final state budget will entail, and it is likely the state will not adopt a budget before June. However, given the Governor’s proposal, we are concerned about the impact of anticipated significant reductions in state funding for education, and a potential liability for one-third of the cost of the teacher pensions. The Board of Selectmen and Board of Education have worked diligently to prepare their budgets, which have been approved by each Board and delivered to the Board of Finance for their consideration. I want to explain how we considered the state budget issues as we formulated the BOS budget.
When the Governor’s budget proposal was unveiled in February, it created a state of great uncertainty among municipalities. The Farmington Valley is hit particularly hard by the Governor’s proposal, with eight area towns seeing a total negative budget impact of $20.1 million. Like many towns, for Canton, this proposal includes a large reduction of education funding (Equalized Cost Sharing Grant), a slight increase in special education and other funding, and a liability for one-third of the teacher pension contribution. This proposal would amount to a net loss to Canton of $1,493,499 in funding, and a $1,230,338 liability, or a net negative impact of $2,723,837. In response to this proposal, local leaders from around the region have exchanged ideas on how to address these significant cuts in our budgets. We have taken a similar approach to many of our Farmington Valley neighbors, and budgeted for the proposed reduction in state funding, but did not include the liability for the teacher pension contribution. This is supported by the fact that the Connecticut Council of Small Towns, of which Canton is a member, has obtained a legal opinion indicating that the Governor’s plan to shift a portion of teacher pension cost to towns is not legal. Therefore, we have prepared for anticipated funding cuts when a state budget is finally adopted by the legislature, but we have not made drastic cuts to core services in anticipation of a worst-case scenario that may not come to pass.
The budget initially presented to the BOS by the Chief Administrative Officer represented a very modest increase of 2.44%, driven by some rising fixed costs. However, in light of the Governor’s proposal, the BOS directed the CAO to reduce the budget so that the impact of the budget would be a zero mil rate increase, assuming that state revenue was level from last year. This was accomplished, and the BOS approved an operating budget of $10,517,908, consisting of $9,427,592 in operating and $1,090,316 in the Capital Improvement Plan. This represents a 1.75% increase in spending, which when combined with the BOE adopted budget and set against the slight growth in the Grand List, would not result in any increase to the mil rate, but for the expected loss of revenue from the state. This potential loss in state revenue, which totals $1,493,499, would therefore need to be made up in a tax increase of 4.53% or 1.36 mils to a mil rate of 31.12. This is an increase to the average homeowner of $324. If we were to also budget for the proposed teacher pension liability, the tax increase would rise to 8.25%, or 2.47 mils to a mil rate of 32.23. This would be a tax increase of $591 to the average homeowner. These figures are uncertain because the budget adopted by the legislature is frequently different from the Governor’s proposed budget.
This year's budget concentrates on continuing basic services, retaining key personnel, maintaining infrastructure, and continuing to fund road maintenance consistent with prior years. There are no new initiatives in town services, as we recognize that this is not the economic climate in which new spending can be considered. The Board of Finance will now consider the BOS and BOE budgets, and may make changes and consider all options to manage the impact of the state budget on Canton taxpayers. The following are important dates in the budget process:
March 20th 6:00 pm – Board of Finance hears budget presentation from BOS – Community Center
March 22nd 7:00 pm - Board of Finance hears budget presentation from BOE – Community Center
March 27th 7:00 pm – Board of Finance public hearing on the budget – Community Center
April 3rd – 6:00 pm – Board of Finance budget workshop (no public comment) – Community Center
May 8th – 7:00 pm – Town Meeting on Budget (currently scheduled for this date; could be moved later in May if warranted by progress on state budget) – Canton High School
I urge you to attend any of these public meetings, and look for updates on the state budget and its potential impact on our community.
Leslee B. Hill