Hamden Council Overrides Mayor’s Budget Veto

The Hamden Legislative Council voted unanimously Tuesday evening to override Mayor Curt Leng’s veto of its amended fiscal year 2020 – 2021 budget.

On Friday, the last day he had to do so, Leng emailed council members informing that that he had vetoed their budget. He cited cuts to police, the board of education, and bulk trash pickup as justification for the veto, as well as the tax increase the council’s budget includes.

In the first few minutes of June 5, the council passed a $248,928,679 operating budget for the next fiscal year, which starts July 1. The council had spent countless hours cutting expenses, adjusting revenue projections to levels members deemed more realistic than what the mayor had proposed, and slashing positions.

Their budget ended up raising taxes by about 6.4 percent. It brings the mill rate to 51.98 mills, up 3.12 mills from the current fiscal year’s mill rate of 48.86. One mill represents $1 of taxes per $1,000 of assessed property value.

Though Leng’s original proposed budget had included a mill increase of only .98 mills, his veto, if sustained, would not have had much of an impact on the mill rate. Mayoral vetoes, as per the town’s charter, do not affect the debt service. The council had voted to remove a $7 million debt restructure from the budget, adding $7 million to the expense total. That expense increase corresponds to about 2 mills. The mayor’s veto would not have affected that change, meaning that if the council had sustained his veto, the mill rate would have been 51.86.

“I felt a direct responsibility to try and save essential services our residents count on, and slightly lower an already too high tax increase, through my veto and offer to work together on a compromise budget,” Leng wrote to the Independent. ​“Asking our neighbors to pay more, yet receive less, isn’t fair and we could have done better together.”

On Tuesday, the council needed a two-thirds majority of those present and voting to override Leng’s veto. Last year, Leng vetoed the council’s budget, and the council did not muster that two-thirds margin.

But this year, it did, with very little discussion. All 14 of the members present voted to override. They did so following a groundswell from residents urging them to. Over 180 people wrote in to voice support for the override. Only 15 letters asked the council to sustain the mayor’s veto. Read those letters here and here.

The council’s budget made cuts throughout town departments, some of which may be painful. The Board of Education must now look for $2.55 million to cut from its budget. The council eliminated 13 positions in the police department (though most of them are vacant). It also cut bulk trash pickup.

Council members said their budget was not perfect, but that it was better than the mayor’s, especially since the mayor’s veto would have had such a minimal impact on taxes. Some said there are still potentially risky revenue assumptions in the budget, though fewer than in the mayor’s. If budgeted revenues don’t materialize, that could leave the town with a deficit at the end of the fiscal year. Hamden is currently running a deficit somewhere to the tune of $10 million.

Council President Mick McGarry said that the council’s budget still has problems, but that it presents a more realistic approach to getting the town through the next fiscal year. ​“The numbers are the numbers, and that’s simply what we have to acknowledge,” he said. It’s not easy to raise taxes on already overtaxed residents, or to lay people off, but it is necessary, he said.

He said he agrees with Leng that the council and mayor need to work together. When he vetoed the budget, Leng said he would bring a budget amendment package before the council as a compromise. McGarry said that type of compromise needs to happen, but that it should use the council’s budget as a starting point, not the mayor’s.

Revenue Views

Tuesday evening after the vote, Leng defended his budget. ​“Neither budget is perfect,” he wrote. ​“It has been repeatedly stated that the Mayor’s budget had inflated revenue projections, which have challenged Hamden in certain years. However, an honest comparison of this year’s budget factually show that both budgets net non-tax revenue projections are only 5 percent different. I mention this because facts matter. I’m afraid this exaggerated narrative may have confused some residents and harmed the process, resulted in higher taxes and cuts to services that may be harmful. We must do better moving forward and I must do better by explaining details more clearly and when necessary refuting such misinformation.”

Leng has been criticized in the past for the revenue projections in his budget. This year, and last year, the council lowered many of his revenue lines.

As Leng pointed out, non-tax revenues, which include all revenues except taxes on the current grand list, totaled $71,405,403 in his budget, while the council’s non-tax revenues totaled $67,718,522. That $3.7 million difference is not as large as some have made it out to be, he said.

Much of that non-tax revenue, though, the council does not control. A little less than half comes from state aid determined by formulas. That leaves just a small portion of the town’s revenues that the council can adjust. Though the council’s adjustments to non-tax revenues resulted in a $3.7 million decrease in those revenues, the council also raised one controversial revenue. It raised a line accounting for Covid-19 aid from the state to $6 million from the mayor’s proposed $5.1 million.

The council also lowered the tax collection rate, anticipating that the economic hardship caused by the pandemic would mean more taxpayers would struggle to pay their taxes. It lowered the rate from 99 to 98 percent. That difference, of course, is not reflected in the non-tax revenues section.

Even with those adjustments, some council members, including Brad Macdowall and Marjorie Bonadies, have said there are still unrealistically high revenues in the council’s budget.

Revenue shortfalls have been par for the course in the last decade in Hamden, though the town has always managed to close out its books without a deficit. Revenues have come in shorter than expected every year for the last decade, audits show. In the early 2010s, those shortfalls were small — sometimes less than $1 million, or around $1 or $2 million. Recent years, however, have shown heftier shortfalls. In 2017, revenues were $3.6 million short. In 2018, they came in $6.4 million short. In 2019, it was $5.4 million.

In 2018 and 2019, the town mitigated the shortfall by paying less into its pension than it had originally budgeted. In the 2018 fiscal year, that required a statute passed by the General Assembly. The town had to get the state to allow a lower required contribution to the pension that year. In 2019, i.(JavaScript must be enabled to view this email address) State law required a payment of $15.9 million, though the council had budgeted $22.6 million to try to get ahead on long-term liabilities. The town paid the $15.9 million required.

In the next fiscal year, however, turning to the pension line for savings in case of a shortfall will not be an option. The town budgeted the full amount required by the state, but no more, so it is legally obligated to pay it.

The town will also enter the fiscal year in a dangerous position. It is currently running a deficit of somewhere near $10 million, maybe higher, and it only has $2 million in its reserves. The council will meet again Wednesday to discuss a debt restructure that would help mitigate $7 million of the deficit, but more savings will be required for the town to close out the fiscal year whole.

As McGarry and other council members said, adopting a budget is only the first step. He said throughout the process that the council will likely have to reopen the budget to make more cuts and find more savings. The council is currently setting up a fiscal stability committee that will search for those savings and propose changes for the long-term fiscal health of the town.