Finance board braces for budget impact from Hartford

The governor’s proposed budget for fiscal year 2018 (FY18) loomed over Wilton Board of Finance members as they tried to look ahead to the town’s budget for fiscal year 2019 (FY19) during their May 16 meeting.

“Even though we’re looking at FY19, we have to look at the state’s FY18 budget to see if there are any shortfalls dumped [because we would] have to pick them up in FY19,” said Board of Finance Chair Jeff Rutishauser.

“The teachers’ pensions are still in the governor’s proposal, and until otherwise, we have to at least take it seriously — and it’s something we obviously can’t cover in our budget.”

Rutishauser emphasized the uncertainty of what’s going to happen in Hartford.

“We just don’t know right now. It’s like in the middle of a baseball game — you don’t know who’s going to win in the fourth inning, so we can’t get too excited about it one way or another,” he said.

Board member Walter Kress said it’s “frightening” that the state “can make contractual obligations to a union and all of a sudden fail on them, then point the finger to municipalities.”

“I’ve never heard of that happening before,” he said. “I feel for the teachers as well, because I’m sure that they have been grossly misled by the unions and the state, and they’re the ones that are in the back end of this. They’re not setting aside money for Social Security — most people don’t understand that.”

Kress said, “Something is going to have to change” and it’s “unfortunate, but I think we have to look very closely at what the authority is of the state … for them to say, ‘We failed at something, therefore municipalities can make it up.’”

This, he said, is “extremely dangerous for every municipality — especially those of us in this part of the state.”

Rutishauser said the town has to plan for all possibilities.

“We’d like it to be the most optimistic [outcome], but we have to recognize what the worst case could be — even if we don’t think it’s legal or justifiable,” said Rutishauser.

“Even though we don’t like it, we have to have an analysis of what the magnitude is and how we can handle it should it come our way — so we don’t get caught like a deer in headlights.”

Rutishauser said the finance board has to have some kind of “doomsday plan” in case the worst-case scenario comes its way.

“What I heard is that it would be $1 million less than what we were going to get last year, plus teachers’ pensions,” he said.

“Hopefully, that’s the worst-case scenario. I can’t imagine it getting any worse than that.”

Rutishauser said the number “could be large” and the town doesn’t have room in its budget to absorb whatever that large number may be.

“We’re talking negative numbers of six to seven figures to our budget,” he said.

If this does happen, Rutishauser said, “both sides of this town are going to have to do things that we probably wouldn’t have considered in the past.”

“You can’t just expect the townspeople to pick up that whole hit — especially after absorbing that ECS [Education Cost Sharing] hit and special education reduction,” he said.

“It’s got to be here and amongst services and taxpayers — it can’t be 100% either way.”

Board member Peter Balderston said the board ought to communicate this with the town, and board member John Kalamarides said it should communicate with Hartford as well.

“We don’t agree with this, and we really should have some pushback there,” said Kalamarides, and Kress agreed.

“We need to push back and say, ‘Wait a minute. We don’t have a seat at the table for any of this,’” said Kress, who also suggested that Wilton and other towns band together to let Hartford know “we don’t like it.”

Rutishauser said the state deficit is “huge” — “almost unimaginable” — and “since they can’t raise taxes … something’s going to be coming our way.”

“I just can’t see any realistic way to solve the problem,” he said.

As for FY19, Rutishauser said, “we can’t consider any increase until we hear that we have some ability to fund it.”

“Even breakeven might not be enough if we’re at a $5- to $6-million difference on the budget we just passed,” he said. “That magnitude kind of upsets all of our budget planning.”

Rutishauser said Wilton “can’t entertain any increase” and “people have to plan for that.”

While he hopes that will be enough, Rutishauser said, it might not be, “depending on how big that hit is coming our way.”

“I just don’t think, as a board, we should be the ones whistling by the graveyard hoping that it’s all going to work out,” he said. “We’re all in it together.”

Rutishauser said the nice thing about working with people from other town boards is that “they all realize we’re all in the same boat together, and when there’s not as much money to go around, people do pull together and say, ‘Let’s solve this problem collectively.’”

“This is probably the biggest challenge we’ve faced — certainly in all my years on the Board of Finance — and this one is potentially the biggest one I’ve seen,” he said, “and we just have to be prepared if it doesn’t change from what we’re being told.”

Rutishauser and Chief Financial Officer Anne Kelly-Lenz will work together to come up with possible scenarios based on news they get from Hartford and will lay them out at the finance board’s next meeting, on Tuesday, June 20.