2010

Posted by Bob on June 3, 2010 under Daily Blogs | Be the First to Comment

The 2010-2011 Borough budget will take effect on July 1, 2010, as the time period during which a referendum could be initiated has passed. The 2010-2011 budget includes an increase in spending of seventy four one hundredths (0.74%) percent over 2009-2010 levels. Pension obligations, which rose by over ONE MILLION and 00/100THS ($1,000,000.00) DOLLARS, represented the line items with the most significant increase (approximately 16.64% over 2009-2010 levels).

As a result of the Great Recession facing our county, Borough spending increases have been kept to bare minimums since the 2008-2009 budget year. Spending over that three (3) budget-year period rose thirty two one hundredths (0.32%) percent; with educational spending increasing by fifty three one hundredths (0.53%) percent, and municipal spending increasing only seven one hundredths (0.07%) percent during that time period.

I have very mixed thoughts about the implementation of our administration’s first Borough budget. Our goal was to have a complete zero (0%) percent budget increase for the 2010-2011 budget. Instructions were given to department heads to prepare their budgets in a legitimate manner to reflect needs, but to assume no increase of 2009-2010 levels. Our overall efforts to prevent any tax increase were hampered by the loss of approximately SIX HUNDRED FIFTY THOUSAND and 00/100THS ($650,000.00) DOLLARS of state revenue before a single dime was allocated.

Significant actions were taken to reduce the ultimate cost to Borough taxpayers. Such actions included but were not limited to eliminating and/or reducing positions through attrition and early retirements, refinancing the Borough’s debt obligations, changing health care providers, reorganizing our public works departments and responsibly eliminating all discretionary spending in all departments.

The Board of Education (“BoE”) faced a similar task. To replicate the educational services offered during the 2009-2010 school year on July 1 ,2010, the BoE faced an increase of approximately SEVEN MILLION and 00/100THS ($7,000,000.00) DOLLARS. The adopted budget removes all but THREE HUNDRED THOUSAND and 00/100THS ($300,000.00) DOLLARS of that amount. Reductions to reach an amount slightly above that figure include but are not limited to an early retirement package offered to educators (teachers and administrators), elimination of approximately twenty (20) additional educator positions, reconfiguration of the school district, changing health insurance providers, renegotiating certain service contracts and eliminating discretionary spending in all sections of the BoE budget. I applaud my colleagues on the BoE for making some very difficult decisions without resorting to the “eliminate school specials and sports” tactics employed in other districts.

The end result is a tax increase of one half (1/2) mill for the 2010-2011 year. A mill represents ONE and 00/100THS ($1.00) DOLLAR of tax for every ONE THOUSAND and 00/100THS ($1,000.00) DOLLARS of taxable property. Naugatuck’s mill rate for the 2010-2011 fiscal year will be thirty one and two one hundredths (32.02) mills. An average home appraised at TWO HUNDRED TWENTY FIVE THOUSAND and 00/100THS ($225,000.00) DOLLARS (assessed value for taxation is 70% of appraised value) would see an approximate SEVENTY NINE and 00/100THS ($79.00) DOLLAR tax increase over 2009-2010 levels.

Any tax increase is significant in these drastic economic times. Members of the Joint Boards of Finance and Mayor and Burgesses (“Joint Boards”) were tasked, however, to create an honest budget that reduced spending to the minimum levels necessary to provide the level of services expected by our local government. I firmly believe we have done so. While all government should incorporate the best business practices from private industry, the reality is that government is in many ways different from the corporate world. Unlike the private sector, local government can not simply eliminate certain services it is obligated and/or mandated to provide or allow such services to be performed by a competitor. Our administration will continue to encourage and promote the incorporation of more common-sense, cost-savings measures common in private industry into our local government. We would be shortsighted, however, not to recognize the inherent differences.

The Joint Boards also withstood the temptation to enact unsound financial practices for politically popular gimmicks. Maintaining the integrity of the Borough’s fund balance, pension obligations and revenue protections will ensure that Naugatuck is financially sound in future years. I am honored to be apart of a culture on the Finance Board that refuses to allow questionable and/or irresponsible business practices to impact the overall and long-term health of the Borough.

An argument could be made that the level of cuts made during the budget process the past two (2) year go beyond levels necessary to meet the needs of our citizens. There is no denying that the Borough’s 2010-2011 spending increase will be well below the increase in the consumer price index over the past twelve (12) months. While school districts throughout the state have been forced to make difficult choices, cuts to Naugatuck’s education budget present significant challenges to providing the best education possible for our children. The early retirement package alone removes approximately one thousand four (1,004) years of collective, educator experience from the Borough’s schools.

The past two (2) years in Naugatuck can best be categorized as an attempt to withstand the effects of the Great Recession. Like most families, businesses and other governments, Naugatuck has trimmed its budget to the lowest levels in the hopes of surviving for a better day. Times may seem bleak now, but certain economic benchmarks indicate the beginnings of national recovery. While unemployment is still alarmingly high, many economists believe that the worst of the Great Recession may have passed. Our long-term efforts to increase our economic tax base must continue, as this is the only way we will be able to provide a quality level of service without increasing the burden placed on residential taxpayers. We, as a community, will make it through these difficult times; and our local government will be stronger and leaner because of the decisions we have made.