Budget Adopted – 4/3/2009
Posted by Bob on April 3, 2009 under Daily Blogs | 
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Naugatuck’s municipal budget for fiscal year 2009 – 2010 was adopted Thursday evening by the Joint Boards of Finance and Mayor and Burgesses. After proposing a slight tax increase to the public on Monday night, the adopted budget maintains the current tax rate and proposes to end eight (8) straight years of tax increases.
Joint Board members needed to trim approximately $500,000.00 from the budget proposed at Monday’s public hearing to prevent another tax increase. The adopted budget trims about $300,000.00, then increases revenues by approximately $200,000.00, by assuming funds from an agreement that is currently in negotiation.
If Naugatuck Taxpayers can legitimately avoid a ninth (9th) straight tax increase, it will be much needed relief. What is concerning, however, is how quickly this budget was adopted given the uncertainty of both revenue and expenditure projections. It is perplexing why the budget presented for distribution to the public did not include year-to-date actual expenditures for the 2008-2009 budget. Presenting a budget without such figures in the private sector would not be acceptable.
The rush to pass a budget prior to the May elections without firm revenue numbers from the state and federal government leaves us with more questions than answers. In a year when the state budget situation worsens by the day, projecting state revenues into a municipal budget is dangerous. If such revenue does not meet what is being budgeted, Naugatuck would face deficit or worse. This is bad business for taxpayers.
The adopted budget leaves absolutely no room for error with regard to expenditures. Despite failure by the administration to secure concessions from three of the four largest municipal unions, no money has been budgeted for potential wage increases. (NOTE: The only union that did agree to a pay freeze this year, the Police Union, will receive a SIX (6%) PERCENT wage increase two (2) years from now and enjoy immediately dramatically increased private-duty rates.) The strategy behind such budgeting is that if no concessions are given, the Borough will be forced to layoff workers to meet budget.
In theory, laying-off workers should solve a budgetary deficit. The reality is, however, that there will be costs associated with this strategy. Naugatuck has a self-funded unemployment compensation system. This means that once an employee is laid-off and goes to collect unemployment, the state will seek compensation directly from the Borough to pay for payments made to the employee. In addition, employees who are laid-off are entitled to accrued benefits such as accumulated sick days or vacation days. If public safety departments are forced to lay-off employees, shifts will still need to be staffed. This will increase overtime costs which already are extraordinarily high. Such direct and indirect costs are not included in the adopted budget.
This approach seems likely. It is hard to imagine that municipal employees will agree to concessions with the current administration given the fact that there has been very little negotiating to this point. Announcing a take-nothing-or-lose-your-job approach is not only demonstrates a poor management style, but is bad business for taxpayers. I have spoken to many Borough employees who have expressed a willingness to sacrifice if the administration was simply willing to negotiate directly rather than in the press. Instead, the Borough is forced to pay lawyers thousands upon thousands of dollars fighting futile arbitration battles.
Even with the financial gambles, gimmicks if you will, infused in the adopted budget, the best that can be done is to hold the line on taxes. We do so at great risk to the financial stability of the Borough and at the expense of future budgets. This illustrates how fundamentally broken our local government has become.
When politicians inevitably begin to tell you how they held the line on taxes this year, ask them the following questions:
- How certain are you that revenues and expenditures are accurate?
- How will this year’s adopted budget impact future budgets?
- On what information did you rely to base your vote to adopt the budget?
- What is the plan to deal with revenue shortfalls that could occur and how will expenses be paid that have been underfunded?
- How will the costs, both direct and indirect, be paid to handle layoffs?
- What are the prospects for next year’s, non-election year budget? and most importantly,
- What steps were taken this year to begin to fundamentally reform our government?
The job of drafting a municipal budget is often an long, thankless task. I give credit to the Joint Board members for their hard work and dedication to the process. I just wish I was a little more secure about the numbers. I hope the unprecedented risks taken by adopting this year’s budget are worth the pre-election headlines.
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