LETTERS: SHU stokes region’s fiscal health ... and more
SHU stokes region’s fiscal health
At a recent Fairfield budget hearing, residents expressed concerns about a variety of fiscal issues, including funding priorities, property rates and rising taxes.
Responding to questions about the rising education budget, officials addressed reductions from the state in education cost-sharing funds, likely changes in forthcoming property assessments, the negative impact of the Trump tax cuts and declines in the local tax base. Specifically mentioned was the loss of tax revenue resulting from the sale of the former General Electric headquarters campus to Sacred Heart University, which as a non-profit entity, does not pay property taxes.
It is important to note that whether or not Sacred Heart purchased the property, the town was going to experience a loss of tax revenue. While GE was paying $1.5M for real estate property taxes, the buildings would no longer be assessed at that level. An assessment at the amount that Sacred Heart paid for the property ($31.5 million) would lead to $800,000 in property taxes by a for-profit purchaser.
While I am sympathetic to the challenges neighboring communities face, it is important to remind residents, legislators and the business community about the profound and extensive value SHU and Fairfield University do provide to the Cities of Fairfield and Bridgeport, and to the surrounding region.
According to a recently released biennial Economic Impact Study examining the role of Connecticut’s private colleges and universities, which is sponsored by the Connecticut Conference of Independent Colleges, Sacred Heart University has a significant impact on the local and regional economies. Total direct spending by the University is in excess of $1.4 billion; direct spending by students accounts for over $99 million; and University visitors spend at least $1.6 million annually in the area. Overall, the University’s estimated total economic impact is $2.3 billion. What’s more, 17,121 jobs have been created to support this population and the University.
The impact study, released last month by the Connecticut Conference of Independent Colleges is reaffirming the critical role of the state’s independent colleges in helping to maintain its economic health. Specifically, the report documents that these 15 non-profit colleges and universities together pump $33.2 billion into the state, based on 2017 data.
In practical terms, the students, faculty, staff and families of SHU and Fairfield University spend millions of dollars locally — renting apartments and buying homes. They patronize local grocery stores, gas stations, pharmacies, restaurants and laundromats and support a wide assortment of community merchants and businesses. Their purchases are vital to the health of the local economy.
In addition, towns are reimbursed every year through the State’s PILOT and Pequot Funds that are designed to help municipalities offset the loss of property tax revenues from non-profit organizations such as hospitals, colleges and universities. While there are many factors effecting PILOT program funding, we estimate the addition of the GE property to Sacred Heart University increased Fairfield’s share of PILOT by at least $200,000. Pressure should be applied by municipalities to have their elected officials and residents advocate for full funding of these critical programs.
Neighbors like SHU and Fairfield University also provide vital fuel for the state’s economic engine. Our students, faculty and programs represent the talent pipeline and access to incubation partnerships employers are craving and need to remain in Connecticut. And while our commitment to innovation, collaboration and service cannot be easily measured, it is equally valuable. For example, SHU has entered into an agreement with Verizon for the creation and operation of an innovative coworking space at our West Campus (the former GE property). This space will be a hub for innovation teams from large and small companies; for entrepreneurs who want to test their ideas, grow their businesses and work collaboratively in a supportive environment; and for individual professionals who want to work in a dynamic office environment.
SHU will provide a fully furnished and equipped turnkey facility on its West Campus, and the University will dedicate resources from faculty and staff to build programming and curricula to connect the innovation community to SHU’s academic mission.
Future plans for our West Campus also call for additional resources that we will share with members of the surrounding community.
This all speaks to the many benefits of having an institution of higher learning like Sacred Heart University as a resident and neighbor. We know our presence has an impact on the community in myriad ways, including reductions in municipal tax bases, but we work hard to ensure that the benefits we offer are positive and our presence and spending far outweigh the loss in tax revenue.
John J. Petillo
Sacred Heart University
BOF responds to questions
The Republican members of the Board of Finance (BOF) would like to address the inaccurate, misleading and seemingly unethical opinion piece written by Ms. Karen Wackerman, the Democrat RTM Majority leader. (Fairfield Citizen, May 10)
First, we suggest Ms. Wackerman review Article 11, Standards of Conduct, in our Town Charter. It states that we as elected officials “shall demonstrate by their example the highest standards of ethical conduct, to the end that the public may justifiably have trust and confidence in the integrity of government.”
Ms. Wackerman’s comments are in direct opposition to this standard. She erroneously labeled Fairfield’s Contingency account as a “slush fund” showing a stunning lack of understanding of Town budget process and basic financial controls. This account is highly regulated by Connecticut General Statues Chapter 106 that states, “The estimate of expenditures submitted by the Board of Finance to the annual town meeting or annual budget meeting may include a recommended appropriation for a contingent fund in an amount not to exceed three per cent of the total estimated expenditures for the current fiscal year.”
This regulated and transparent process is utilized annually by the BOF and the First Selectman’s administration to fund unexpected or unquantified, (at the time of the budget), expenditures such as contract settlements, lawsuits, legal costs, investigations or emergencies. It has been effectively administered by BOF members over many years including First Selectmen Tetreau in his tenure as a BOF member.
We want the taxpayers of Fairfield to know that their hard-earned tax dollars have a good steward in the Republican-led BOF. The Contingency account has never, in the recent history in which we have been elected, been used for anything but its intended purpose and if any funds are not utilized those funds automatically get added to the Town’s annual surplus account.
Regarding the FY 2020 paving budget, the Department of Public Works (DPW) requested $2.0 million dollars for paving in their budget. First Selectman Tetreau increased the request to $2.7 million dollars without any explanation or discussion with the Republican caucus on the BOF.
As has been our practice with many large annual Town expenditures, the BOF had, for multiple budget cycles, requested a DPW paving plan. The last time a comprehensive long-term plan was presented was in 2011 from the previous DPW Director. Having not seen a plan, the BOF, on a 8-0-1 bipartisan vote, approved the original department request of $2.0 million and moved $500,000 to Contingency with the stated purpose of more fully funding paving when DPW presented their long-term paving plan.
This is not shortsighted as Ms. Wackerman suggests, it is fiscally prudent and with the appropriate level of oversight. This oversight was warranted especially given our recent issues within DPW that has resulted in over $800,000 in taxpayer expense related to the clean-up of a fill pile at One Rod Highway. The BOF paving discussions and adjustments were made in a public forum with complete transparency, any inference otherwise is nothing short of slander to the BOF. With the Democratic majority of the RTM subsequently voting to remove the aforementioned $500,000 from contingency, there is now no path to additional paving funds in the 2020 budget.
On May 9th, in accordance with Fairfield Town Charter, the BOF unanimously approved the mill rate for FY 2020 at 26.79. This equates to a 1.63% tax increase from FY 2019. This approval contains a $221,000 reduction in taxes from the RTM proposal. We thank everyone from the Town departments and the Board of Education for their cooperation.
James B. Brown
BOF Vice Chairman on behalf of the BOF Republican Caucus
BOF overreach and over-taxation
I am very proud of what the RTM achieved in its vote on May 6th. After vigorous debate and consideration, the RTM passed a budget that 1) reduced the tax increase and 2) pushed back on government overreach by removing an unaccountable slush fund in the amount of $500,000.
The Board of Finance foolishly cut $700,000 from DPW’s paving budget and increased the town’s “Contingency” account by an extra $500,000. This Contingency account is specifically for “unknown or unforeseen” costs, giving the town flexibility to deal with emergency situations and highly uncertain circumstances. In order for money appropriated to Contingency to be re-allocated to a town department for spending, the BOF must vote to move the money out of Contingency. The effect of putting additional money into Contingency that may or may not be spent is that the BOF overtaxes the residents of Fairfield for undetermined and unknown expenses.
We know, with certainty, that a significant amount of utility work is wreaking havoc on Fairfield’s roads and requires DPW’s work. We know that our town would benefit from restoring the $700,000 that the BOF cut from the paving budget. Our full executive body, the Board of Selectmen, had previously approved this funding for paving. The Department Head, and our elected Chief Executive Officer, First Selectman Tetreau, both appealed the BOF’s myopic decision to reduce the DPW paving budget.
Unfortunately, we were unable to get the 2/3 vote of the RTM required to restore the $700,000 to the DPW budget, because not a single member of the RTM Republican Caucus supported the paving funding request.
Minority Leader Pam Iacono’s proposition that Contingency is the only way to know that this funding will actually go towards paving is absurd. Contrary to her unfounded assertion, all it does is create additional uncertainty as to how the money will be spent, because it requires an additional vote to authorize its use for any purpose. Quite simply, if you support properly funding our town’s needs for paving, you put that money in the paving portion of the budget, not in Contingency. Ironically, Ms. Iacono herself railed against Contingency in the RTM’s 2017 budget vote and vocally supported cutting this line by $825,000 to avoid overtaxing the residents of Fairfield, stating, “I, for one, wish [the $825,000] were put back in the line item [for DPW Paving and DPW Capital] and not in Contingency ... I see no other choice than reducing [Contingency] to get our taxes down.”
The RTM Democrats listened to our constituents, and unlike BOF Chairman Flynn and the RTM Republicans, we recognize that every dollar in the budget should count. We effected an optimal balancing between town services (supporting education, the libraries, human services and beaches) and affordability (in response to rising costs of living, the state’s economic crisis, the debilitating Trump Tax Plan and a failure to increase tax relief for seniors).
We are proud to support a budget that lowered the tax increase to 1.71%, from the BOF’s 1.90% recommended increase. We are also proud that we pushed back against the BOF on its overreaching attempt to manage our town’s departments and overtax the residents of Fairfield.
Jill Vergara, RTM Representative District 7
Deputy Majority Leader