Finance board talks Malloy’s proposed cuts
After Hartford’s majority legislature fell $540 million short of addressing Connecticut’s $930-million deficit estimate, Gov. Dannel Malloy revised on April 12 his office’s Feb. 3 midterm budget proposal by axing all funding through the Education Cost Sharing Grant for a list of affluent towns that includes Wilton.
In light of this, Wilton’s Board of Finance held a special public meeting April 14 to hear from state legislators Toni Boucher and Gail Lavielle ahead of the board’s regular meeting on April 19.
Wilton expected to be granted $1,461,523 in fiscal year 2017 through the Education Cost Sharing Grant (ECS), and budgeted for $1.2 million. Malloy’s plan would have the town receive none of that.
This puts the Board of Finance in an awkward and, according to several members, unprecedented position because no one can cut the budget at this point except for voters at the Annual Town Meeting.
“It’s a weird situation to say the least,” Richard Creeth said. “It’s possible that we can start next fiscal year with … a $1.2 million adverse variance on July 1, which would be a first.”
Boucher and Lavielle told board members that though he balanced the budget, Malloy’s proposal is politically charged, and his office would rather raid various funds than raise taxes, because the public has had enough of that, and it’s an election year.
“What you’re seeing from the governor, most of us believe, is a big scare tactic to get everybody back to the table and start to negotiate again,” Boucher said.
“This is something of a political move, but to get into that too deeply isn’t going to help us one way or another. I think we really have to focus on what the big risks are,” Lavielle said.
“You look at something like this and it’s a cruel joke, from a planning standpoint,” Chairman Jeff Rutishauser said.
“We take great pride here in an orderly process, to put together our budget, and then you see what’s going on in Hartford and it’s not a big number, but what you put into your budget, you have to have some reliability that it’s going to come,” he said.
“Can we even budget from the state?” he asked. “Because the reliability factor is gone. If they’re going to use our ECS as a ping pong ball for political reasons, and go from $1.4 million to zero to back to $600,000, how can you begin to plan for that, and set a mill rate, with an expectation something's coming from Hartford?
“Given that, we’re going to have to discuss whether we can rely on any of it in the budget, or treat it as a windfall if and when it comes,” Rutishauser said.
“Unfortunately, the conclusion you’re coming to, Jeff, is probably what businesses have come to in the same way,” Boucher said.
Lavielle said Wilton should be wary that the affected towns are all wealthy, and that puts them in a weak negotiating position within the state legislature.
“These cuts focus on zeroing out wealthy towns,” she said. “Most legislators in Connecticut do not represent wealthy towns. They just don’t. There’s not that many wealthy towns. There’s 28 or 30 that are concerned here.
“When those who are negotiating the budget are doing it, whence comes their incentive to accommodate us? That’s an important point,” Lavielle said.
Warren Serenbetz asked Lavielle if the $930-million deficit estimate has the potential to grow if this year’s revenues fall short.
“There is some concern that it might be bigger,” Lavielle answered. “Over the course of this year, every time there’s been a quarterly tax payment date, the revenues have been way, way down, hence the growth from 540 to 930. So it is really important to see what those are.”
After digesting the information, Creeth pondered the board’s options.
“All we can do is encourage both the town and the Board of Education to be as cost conscious as they conceivably can be, and recognize that we’ve got charter authority and we’ve got reserves. I don’t know what else we can do,” he said.
Warren Serenbetz said, “The charter authority in the budget is about $1.2 million, so if we had to cut everything out, it would eliminate charter authority, but you’re not talking about delving into the unassigned fund balances, where we set our 10% number for our bond rating.”
“Unless you have an unforeseen contingency,” Creeth cautioned.
Second Selectman Michael Kaelin spoke as a member of the public and called for the Board of Finance to do what he considers most prudent. He said board members should do their best to inform the town voters, the only people who can modify the budget at this point in time.
“Nobody is going to cut this budget in reaction to what the state’s done other than the people of the town of Wilton. It’s going to be their decision and their choice, and what I’m asking the Board of Finance to do is to tell them what their choices are, and tell them what the consequences of those choices are as best you can,” Kaelin said.
The current legislative session ends May 4 — one day after Wilton’s Annual Town Meeting. Rutishauser asked Wilton’s state legislators if they could offer any insight into what the outcome will be, and when that outcome will be published.
“I think there’s not much more time [left in the session] after the revenues come in,” Lavielle answered.
“We probably won’t see a tally for the April 15 revenues until the end of next week. So at that point, there will probably be weekend scrambling, and then there may be something that comes out, some point of view, some whatever, the following week. And at that point, there will be a little over a week left in the session.
“I kind of wonder whether it will be possible to get a budget before this is over, and then it can go on as long as people push it. If there is an effort really to make this thing drag into progressive deficit mitigation by little bits after the fiscal year starts, in order to slide into the election, to get a tax increase after that [election], well it could go that long, but I don’t know that anyone would be that disingenuous. I honestly don’t.”
Even though they’ll be on the floor the whole day, both Boucher and Lavielle pledged to be available by phone on May 3, if a budget hasn’t been agreed upon by that time.
The Annual Town Meeting to discuss the budget will take place on Tuesday, May 3, at 7:30 p.m. at the Clune Center, with voting following the meeting.
Residents may also take part in the adjourned vote on Saturday, May 7, from 9 to 6, also at the Clune Center.
Malloy’s proposal also cuts $101.4 million in municipally shared additional sales tax revenue, but town decision makers thought that might happen and did not budget for the $547,000 they stood to be granted through the new program.