Fairfield faces 2 percent tax hike
Published 11:29 am, Friday, April 2, 2010
Taxes will likely go up about 2 percent next fiscal year, based on the budget that was approved at Thursday night's Board of Finance meeting.
Though the finance board exacted amounts from each town department's proposed budgets, the overall figure is slated to increase to $251,734,722 for 2010-11, adding approximately $1,382,000 to the tax base.
Board of Finance Chairman Tom Flynn, interviewed the morning after the BOF's approval of the budget, said, "I think everyone would have liked for the increase to have been lower, but this budget increase was driven by three items: the reduction in other revenues due to general economic conditions as well as the state budget issues potentially impacting state aid to the town and one-time items; funding contractual obligations of the town, such as the side letter agreement between the first selectman and the fire union; and appropriately funding long-term liabilities such as the pension and the retiree medical benefits -- issues that all state and local governments are facing."
Revisiting an area that had been in contention earlier this week, the Board of Finance Thursday night voted to restore $100,000 to the Board of Education budget, despite the Board of Selectmen's recommendation to knock it down to $141,471,425.
The measure passed 8--1, with board member Robert Stone opposed.
Though he knew that the motion to restore the money would be approved, Stone said he felt the need to state his opposition for the record.
"The problem I'm having is I don't see the Board of Education trying to cut things, for instance in central office or administration. ... I think there's a lot of fat there," he said. "We asked the teachers and everyone else to take cutbacks or to not take raises, and they agreed to it and bargained in good faith."
There are other ways to raise revenue, he said, like charging students for parking or having athletes pay to participate in sports.
Also pertaining to the school district funding was the finance board's initiative to add $328,000 to a town contingency fund that would support special education services if needed. Special education funding relies heavily on state contributions, but those contributions won't be quantified until January or February 2011.
The money would be added to the town's contingency funds, and its use would need approval from both the Board of Finance and the Representative Town Meeting before it could be used.
"The last thing we want to do is short-change our education system," board member Kevin Kiley said.
The board approved this motion 8--1, with Stone opposed. The funds will be added to a town contingency fund.
Taking a gamble
One sticky area for board members Thursday night was with regard to the town's conveyance tax figure. The number, which is a prediction based on how well the town's real estate sales do over the year, was recommended by Fairfield's Chief Fiscal Officer Paul Hiller at $1.2 million for the coming fiscal year.
"The one thing that we see is that the Case-Schiller index has been up for eight or nine straight months nationally and within the region," Hiller explained. "I believe very firmly that we have bottomed. ... Anything there would significantly bump that number."
Board of Finance member Robert Bellitto Jr. countered that the number might be too high, and initially proposed reducing that number to a flat $1 million. He cited that without the built-in federal tax incentives next year, property sales might not increase as steadily as they have been lately. Predicting a higher number than what actually comes in would leave the town ongoing spending accounts to cover the remainder of the money that had been built into and accounted for in the budget.
First Selectman Ken Flatto supported Hiller's original estimate.
"The lowest level we've had is 1.130. The fact is, the sales of real estate dropped by 50 percent. To assume worse than that level is kind of just picking a number out of a hat," he said. "The town normally predicts the conveyance tax to come in somewhere between 1.5 and 2.4," he said. "I think if we stay abnormal much longer this country's going to have a tough time."
Board member Christopher Dewitt firmly opposed the higher number.
"We spend three nights, ungodly number of hours beating around numbers that got us down to $600,000 ... and now I think we're $400,000 higher than we were before. I can't support not reducing it down to the original level," he said.
However, board member Micheal Tetreau pointed out that, at best, arriving at that line item is always an educated guess.
"There's just no way to tell. It's a little bit like rolling the dice. Hitting the number that Mr. Hiller said for this year is not unreasonable. I'm not comfortable dropping it 18 percent (to $1 million). ... I think keeping it at flat level or something like 1.2 is a more reasonable guess."
Seeking a compromise, Bellitto and BOF member Ken Brachfeld supported a figure of $1.1, which the board approved by a measure of 6-3.
If the number comes in lower than expected, the funds would have to come from the town administration's ongoing spending.
Additional action by the finance board Thursday included an adjustment totaling close to $1 million in "other revenue" (other than property tax) related to investment income ($400,000) and reducing by $500,000 the sale of town-owned property, which the first selectman had counted toward balancing the budget.
"The unanimous opinion of the Board of Finance," Flynn said, "was that it was not appropriate to use a $500,000 one-time item to balance the budget. Instead, if the town is going to sell property/land, proceeds should go to the town's fund balance, which is lower than many other Triple A-rated communities."
The board noted that Stamford just lost its Triple A bond rating for having a low fund balance.
With the non-tax revenue numbers finalized, the board will finalize the revenue numbers as a whole when it sets the mill rate May 4.
Reporter Kirk Lang contributed to this report.