Gov. Dannel P. Malloy’s ’s latest budget proposal cuts an additional $2.1 million from Branford’s funding, creating a possible hike in the mill rate to 7.64 percent, town officials say. It’s an extraordinary jump that would have a far-reaching impact on the town. Had the state not made drastic cuts in the town’s budget, the taxpayer’s bill would have gone up by 1.42 percent.
To make matters worse, the three major Wall Street rating agencies downgraded Connecticut’s bonds in the last ten days, casting yet a longer pall over the state’s situation. They are S&P Global Ratings, Moody’s Investor Services and Fitch Ratings.
The Board of Finance (BOF} will still hold a scheduled meeting tomorrow, May 22, at Fire Headquarters at 7:30 p.m. where the state budget crisis will be discussed. However, the BOS has postponed setting the mill rate until a special meeting called for May 30. The Town Charter requires the mill rate to be set by June 1. The mill rate is used to calculate the amount of property tax.
Since February, Finance Director Jim Finch and First Selectman Jamie Cosgrove have been grappling with proposed state cuts to the town’s budget. First the governor announced a bold plan to cut a huge state deficit, deciding that towns across the state would be required to pay their fair share of teacher pension costs because the state had failed to do so over the years. Branford’s share was $2,747,784. Last week they learned Branford might lose an additional $2.193 million or more in state funding. The proposed 2018 town and school budgets came in low. Union contracts remained intact.
In an interview in his office on Thursday, Cosgrove said that he and Finch both understand the proposals from the governor’s office and how each impacts a municipality. “But there is no detail with other proposals, (meaning the Republican or Democratic budgets) as to where those adjustments will occur. So we can’t predict how that will fully impact Branford and its budget. We are trying to develop this budget on the best information we have available,” Cosgrove said.
The state’s budget is supposed to be voted on by June 6. But that deadline is unlikely to be met. A special session is likely to be called to vote on the state budget if legislators can work that out.
State Rep. Sean Scanlon, who represents Stony Creek and Pine Orchard in Branford and the town of Guilford, is hoping both sides can get together.
“Given the size of the deficit and the close margins we have in both the House and the Senate, there is a lot of uncertainty about how the budget process will play out in the final two weeks,” Scanlon told the Eagle. “My hope is that my colleagues and I can do what my constituents did in Guilford a few weeks back at my Citizens Budget Workshop: sit down at the same table, put aside the political rhetoric, and find a compromise in the best interest of the state. People I talk to are sick of the fighting and want us to get things done together. Well, this is our chance.”
Malloy’s cuts were targeted at public school education. Branford no longer receives any funding through the state’s Education Cost Sharing fund, for example. Overall, the town’s budget relied on expected aid from the state, a state that is now facing possible financial disaster.
Town Budget Process
The Representative Town Meeting (RTM) met on May 9 and adopted a whopping $111.8 million school-town budget by a vote of 22 – 6. As of that night, the proposed budget would increase the taxpayer’s bill by 5.33 percent. After the governor’s May 15 announcement removing an additional $2.1 million from Branford’s coffers, the taxpayer’s bill could increase by 7.64 percent, town officials calculated based on the approved RTM budget.
Branford’s second set of cuts was part of the governor’s May 15 decision to withhold $19 million in outstanding municipal aid in order to help close a last-minute state budget deficit. The proposed mill rate mill rate of 28.87, arrived at on May 9, could now climb to 29.50. Meanwhile state Republican and Democratic sides of the aisle are preparing their own budgets.
“Our Last Time Out”
These new developments prompted Cosgrove and Finch to try to buy time in order to try to figure out the state’s next moves. As a result, the BOF decided to postpone Finch’s formal presentation on the town’s fiscal condition for 2017 – 18 and a vote on the proposed town mill rate until Tuesday, May 30. A special BOF meeting will be held on that date at Fire Headquarters at 7:30 p.m. The mill rate must be set by June 1.
And it will be regardless of the state’s difficulties. If the state cuts further into the town’s budget after the mill rate is set or other scenarios develop, the BOF, Finch and Cosgrove will no doubt reconvene. Meanwhile, the town awaits additional word from the state.
“We are using our last time out,” Finch said in an interview. “Everybody has proposals; they are all competing proposals. They all have union concessions as a basis for their proposals. Yet that has not happened,” Finch said of the state’s dilemma.
The week-long delay to set the mill rate, Finch told the Eagle on Thursday, is a way to buy time in order to get a better handle on the state’s fiscal situation before it sets the mill rate on May 30. The town’s tax bills to homeowners and businesses will be sent sometime afterwards.
Legislative Complications
This year there are complications in the legislature because of an evenly divided Senate. In the house, the Dems once had a healthy majority. Now they hold their smallest majority, with a 79 – 72 advantage and on same days they are basically tied evenly as is the current Senate. In addition, the Democratic caucus is not on one page. Within the party Dems remain at odds as party moderates and progressives duel it out.
A major increase in the mill rate, which determines the property tax for homeowners and businesses, comes as property values are depreciating in shoreline towns. Branford’s next revaluation of all town property takes place in 2018.
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