Budget struggle looming: Selectmen prepare for week-long meetings
Town and school budget requests — over 3.5% from town departments, 4.83% for schools — face a gauntlet of meetings and discussions, with heavy downward pressure from recent changes by both state and federal governments.
In December, Congress rewrote federal tax law, reducing rates but limiting deductions allowed for state and local taxes (SALT) to a total of $10,000.
First Selectman Rudy Marconi said a typical Ridgefield taxpayer might pay $20,000 a year between state income tax and town property taxes. Holding deductions to half that might cost an average taxpayer $2,500 — a bigger hit than can reasonably be made up by cutting town and school budgets, he said.
“What would we need to do in Ridgefield to save every residential taxpayer the average of $2,500?” Marconi said.
Millions and millions would have to be cut from town and school budgets, totaling $142 million this year.
“There’s nothing we can do at the local level that can negate the potential impact of the limitation on SALT as a deduction,” Marconi said.
And in 2016, the state adopted a 2.5% cap on annual municipal spending increases — town and schools together.
“The 2.5% statutory cap is in place,” Marconi said.
The state exempts certain categories of spending from the 2.5% calculation — most significantly, special education, but also debt service, money for court orders or arbitration awards, and disaster spending. Exceeding the cap means reduced grant revenue from the state.
Many budget meetings are planned to sort things out.
The school board budget meetings are Monday, Feb. 5, and Monday, Feb. 12, at 7:30 p.m. in the town hall annex. Public hearings on its budget are Saturday, Feb. 24, at 10 a.m. in the Scotts Ridge Middle School auditorium and Monday, Feb. 26, at 7:30 p.m. in the town hall annex. The board vote is expected that night.
The Board of Selectmen’s work on town departments’ budget requests begins next week, with nightly meetings in town hall Monday, Feb. 5, through Thursday, Feb. 8 — all at 7 except Wednesday’s, which starts at 7:30.
And the first week of March, the selectmen have another series of budget meetings scheduled, Tuesday, Wednesday and Thursday evenings, March 6, 7 and 8, and Saturday, March 10, at 10 a.m.
“The first week of February allows us to see if there’s any additional information the board needs,” Marconi said, before the March decision-making meetings.
The March meetings will include discussions with the school board before the selectmen’s non-binding recommendation concerning the school budget — and decision-making on town department budgets.
“I can’t speak for Board of Education …,” Marconi said, “but I can speak for Board of Selectmen and say our operating came in with heavy requests for additional personnel. That request will be reviewed, but in my capacity as first selectman, I don’t see us adding to the personnel — but that will be up to the Board of Selectmen.
“Our starting point without personnel is about 3.5% — our goal is to be under 2.5%, minimum. If we can get it down to 1%, that would be great.”
That’ll mean work — especially with skyrocketing health insurance costs.
“We’re looking at an insurance increase of 15% — unsustainable!” Marconi said.
“The town pays $4 million in premiums. An insurance premium increase of 15%,” he said, “we’re looking at an increase of $600,000.”
“We need to become creative, look outside the box, to reduce these costs,” Marconi said.
“We need to look at and reassess how we do things: how we plow snow, how we do inspections. We’ve got to look at everything. There’s nothing sacred, as far as I’m concerned.”
The Board of Finance reviews both the school board’s and the selectmen’s requests, starting with a public hearing on the combined budget Monday, March 26.
Finance board budget deliberations are planned March 27 and 28, and April 2, 3, 4, and 5 — though sometimes they finish the budget in fewer meetings than scheduled.
The finance board’s 2018-19 budget will go to voters in May.
“I’m not sure I want to comment much more than what I said at the tri-board, which was that I believed tax increases should not exceed the rate of inflation, which the Fed has targeted at 2%,” finance board Chairman Dave Ulmer said.
“I think that is even more imperative, given the tax law just passed by the Congress. The provision to limit state [and] local tax deductions to $10,000 will make it hard on many in Ridgefielders who itemize those deductions currently. I doubt if the lower rate and higher standard deduction will make up for the loss of a lot of Schedule A deductions. … I think the public will be telling us that in spades.
“But I did say, at the tri-board, that to keep taxes under 2%, the overall spending increase for town and schools could not be much over 2.5%.”