nothin Hamden Council Raises Taxes 6.4% | New Haven Independent

Hamden Council Raises Taxes 6.4%

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Holding their noses and excoriating the product of a month of work, Hamden Legislative Council members voted Thursday evening to approve a budget that would raise the town’s property taxes by 6.4 percent.

The town’s mill rate currently stands at 48.86 mills. One mill represents $1 of taxes per $1,000 of assessed property value. In April, Mayor Curt Leng proposed a budget that would raise the mill rate to 49.84 mills.

The budget the council passed Thursday would raise the mill rate by 3.14 mills to 51.98 for the fiscal year starting July 1.

The vote came at a few minutes after midnight at the end of a six-and-a-half-hour meeting that culminated what council members said was the hardest budget season of their careers. Most said the budget was not a product they were not proud of, with issues unresolved.

The budget passed with eight in favor, three opposed (Austin Cesare, Athena Gary, and Brad Macdowall), and two members requesting to be marked as not voting” (Kathleen Schomaker and Justin Farmer).

As many council members, and Leng, said, the budget makes deep cuts to many departments. It slashes 21 positions and forces the Board of Education to look for $2.55 million in savings. But it still raises taxes significantly.

It is not a great budget, but we have a choice of two,” said Council President Mick McGarry, referring to the choice between the council’s and the mayor’s budgets. I think our budget is better.”

We’ve done some really crappy things,” said Councilwoman Marjorie Bonadies, who like McGarry, ended up voting in favor.

Despite its flaws, council members seemed to be in agreement that their budget is more realistic than the one Leng proposed in April.

The council set out at the beginning of the budget process to craft an austerity budget,” in McGarry’s words, that will see the town through a period of global financial crisis. Council members met over the Zoom teleconferencing app four times a week for a month. Each meeting lasted at least three hours, a few going as long as seven. They scrutinized every line and tried to cut as much as possible.

Ultimately, the council ended the process with a budget that left many uncomfortable with both the painful cuts they had made and with the fact that it still wasn’t enough to keep taxes at bay.

Leng originally proposed a budget totaling $246,936,456. The council’s budget totals 248,928,679, a $2 million increase despite cuts.

The council made millions of dollars of cuts throughout the town’s departments. It slashed $1.36 million from the allocation to the Board of Education that the mayor proposed ($1.61 originally, then reduced by $250,000 Thursday on a motion by Austin Cesare), which was already nearly $500,000 less than the budget the board passed in February. It also took $700,000 of revenue from the board, which must now look for $2.55 million in cuts to its budget. That will likely require layoffs and eliminate equity initiatives and other programming.

The council cut 21 positions, 13 of them in the police department. It cut seven officer positions, six of them currently vacant, two lieutenant positions, one of them currently vacant, and four vacant support staff positions. Cuts to the police department totaled around $1.8 million, the second-largest cut to any department after the BOE, if you count the $700,000 in board revenue the town will count for itself.

It also cut two firefighter positions. Fire Chief Gary Merwede has frequently told the council that every position cut in his department simply triggers more overtime spending because the department needs to meet minimum manning requirements laid out in its union contract.

The council made cuts to nearly every other department, trying to find anywhere it was possible to slash. It cut bulk trash pickup entirely, slashed overtime lines in many departments, eliminated non-contractual raises, cut budgets for department supplies, and found a myriad of other small line items to lower.

But those cuts were not enough to balance the crushing weight of contractual and other legal obligations and a few key large-dollar lines.

Chief among the expense-side drivers was a $7 million debt restructure line that Leng had included in his budget. The council eliminated it. On Saturday, Finance Director Curtis Eatman and financial adviser Barry Bernabe urged the council to remove it, saying that leaving it in risked exposing the town to financial catastrophe. Bernabe said that based on the town’s financial position, it will be very tough to complete it. By including it in the budget, the town would risk a relatively likely scenario in which it could not complete the restructure and would then be short $7 million it would need to pay for its debt service.

Bernabe recommended attempting the restructure, but not including it in the budget, meaning the town would have the funds to pay for its full debt payment. If the council is able to complete the restructure, it would use the savings to help mitigate an anticipated deficit in the current fiscal year that totals somewhere between $8 and $12 million.

By removing the debt restructure line, the council had to find $7 million in cuts elsewhere. Of the $7 million it needed to cut to not increase the budget total above the mayor’s proposed total, it found only about $5 million.

I will be carefully reviewing this with our finance department and our financial advisers,” Leng wrote to the Independent when asked whether he would veto the budget. I don’t want to hit our residents with higher than needed taxes and lower public safety services — I have real concerns.”

Leng said he is specifically concerned by the mill rate increase and by the cuts to public safety departments and the BOE. It means less service for more cost,” he wrote.

The Devil Is In The Revenues

The $2 million increase over the mayor’s budget total accounts for only a small portion of the mill rate increase. A vast majority came from slashes to revenue lines.

Though a majority of the town’s revenue comes from taxes, and another large portion comes from the state, some comes from revenues in various departments. Leng has frequently been criticized for putting revenue projections in his budgets that many say are overly optimistic, leading to revenue shortfalls at the end of the fiscal year. Many revenue lines in his proposed budget were higher than the actual revenues of previous years. They did not reflect a year in which the town expects significant losses in revenue due to the economic downturn from the pandemic.

Council members slashed revenue lines throughout the budget, trying to make them more realistic. But cutting departmental revenue lines has a consequence: Every dollar you decrease in non-tax revenue lines, you have to make up for with tax revenue.

The council cut about $3.7 million from non-tax revenue lines. Those cuts included a $1 million cut from anticipated back taxes, which the mayor had set $1 million higher than the average of the last three years. The council also decreased an anticipated voluntary contribution from Quinnipiac University from $1 million to $500,000.

On Thursday, at the last minute, the council also got word that the state is likely going to give it $1 million less in Education Cost Sharing (ECS) funding than it had originally anticipated.

The mill rate got another boost because the council lowered the expected tax collection rate in the budget. A lower tax collection rate means a higher mill rate because you must tax at a higher rate to achieve the same amount of revenue.

The council originally lowered the collection rate to 97 percent, down from the town’s usual assumption of 99 percent, to account for people who won’t be able to pay their taxes due to the pandemic. On Thursday, the council raised it to 98 percent.

While the council cut many revenue lines, it left one controversial line high. In his budget proposal, Leng included a $5.1 million revenue line to account for Covid-19-related relief from the state. State legislators criticized him for including the line, saying they did not think it was realistic. He later recommended increasing that line to $7 million. The council funded it at $6 million.

On Saturday, Eatman urged the council to budget that line as conservatively as possible” because he said he did not have any assurance that the town will receive those funds. While the state and FEMA will reimburse Covid-19-related expenses, much of the aid for municipalities that has already been authorized cannot be counted as revenue to pay for normal operations.

Some council members said including the line would put pressure on the town and its state delegation to fight for more state aid. But the inclusion of the line exposes the town to risk. It may well get those funds, but if it does not, it may find itself short a few million dollars partway through the fiscal year. If that happens, council members said they might levy a mid-year tax increase on residents.

Looking Ahead

At the beginning of the budget process, McGarry proposed a plan for the next fiscal year that would allow the town to deal with the financial uncertainty that defined the budget process. The first phase of the plan involved crafting an austerity budget. That phase is now done. Next comes the evaluation phase, then will come some mid-year adjustments to the budget, and then finally the recovery phase.

The council, supposedly, will soon establish a committee that will examine town departments, consult with experts, and determine how to make changes to realize long-term savings.

The next few months will likely also feature negotiations with unions. The prospect of union concessions loomed over the council throughout this year’s deliberations like the fruit just out of reach of a famished Tantalus’ (pictured) grasp. A vast portion of town expenses are in salary lines and other personnel expenses. All employees except the top administrators in departments are in unions whose union contracts give employees raises and benefits that the town is legally obligated to provide.

Council members frequently said that the town must open negotiations with unions to get givebacks.

Those givebacks though will not come as cost savings to the town on top of what was budgeted, however, because they have already been accounted for in the budget. Leng’s proposed budget included a line anticipating $2.5 million in union concessions and attrition savings. The council did not change the line. That means the town must realize $2.5 million in savings from concessions just to fulfill the budget’s expectations.

At the end of a long night of deliberating, with nerves frayed, council members said they were not happy with their final product. Some gave a particularly bleak view.

Both budgets don’t balance,” said Macdowall, adding that the council’s budget comes closer to balancing than the mayor’s. Macdowall ended up voting against the budget. By voting for the council’s budget, I was being asked to vote for a budget that didn’t balance, sent the town to MARB, charged residents more on the way to MARB, and gutted their services,” he said, referring to the Municipal Accountability Review Board, which is the state agency that takes control of town finances for towns in deep financial distress.

The budget now comes before Leng, who must decide whether to veto it. If he does, as he did last year, the council must override his veto with a 2/3 vote or Leng’s budget will go into effect.

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