Taxes, debt, school spending, growth: Finance candidates share their views
State cuts, education spending, seniors and taxes, the town’s long-term debt, its “fund balance,” and fostering growth fueled the discussion as finance board candidates exchanged views before a crowd of more than 100 at a League of Women Voters forum on Tuesday, Oct. 3.
Asked about the state budget crisis, the candidates were a chorus of despair.
“I think we’re going to lose just about everything,” said Dick Moccia, Republican candidate and former Norwalk mayor. “It’s an economic tsunami.”
Viewed as a wealthy town with well-managed finances, Ridgefield had its relatively modest state funding cut.
“People say Ridgefield is an affluent community — it may well be. But not everyone in town is affluent,” Moccia said.
Michael Raduazzo, a Republican incumbent and former school board member, said the finance board anticipated state cuts.
“We zeroed out line items, certain line items of revenue coming from the state,” he said.
Given its financial duress, Raduazzo added, the state might cut “excess cost reimbursement” that Ridgefield — like all Connecticut school systems — receives annually to help cover high-cost special education students.
Raduazzo put Ridgefield’s excess cost reimbursement at $1.4 or $1.5 million. “There’s some chance of losing that,” he said.
“What we did this cycle is be very, very conservative,” said Sean Connelly, a Democratic incumbent.
“We had really good communication from our state representatives,” he added.
“All we can do now is control what we can — and budget conservatively.”
“What the governor is doing now is picking winners and losers,” said Marty Heiser, Republican incumbent.
He worried towns may be saddled with teacher pension costs previously handled by the state.
“We had no hand in negotiating those pension funds,” he said. “It’s just an expense coming down. …
“We will manage it,” he said. “But I don’t think it’s fair and I don’t think it’s equitable.”
“The good news is, Ridgefield’s done a nice job predicting its budget,” said Amy Macartney Freidenrich, a Democrat who owns Ross Bread bakery.
She had praise for the incumbents, saying she liked “the judgment of the board and way they’ve been able to work with the Board of Education.”
Candidates were asked about education spending, “given the importance of education to Ridgefield’s budget.”
“The Board of Education and Board of Finance should meet more often during the year,” said Moccia. “It’s going to take compromise and it’s going to take communication.”
“Collaboration, communication — we need all of that in coming up with a budget that’s fiscally responsible,” said Raduazzo. “We need to work with the Board of Education to understand fully what programs they want to put in and what the cost of them is going to be.”
“Every year this is a tough subject,” said Connelly. “We can’t just say as a Board of Finance, ‘You need to cut your budget X amount.’ We need to understand it.
“Last year, when I got appointed to the board, I went to every single Board of Education meeting,” Connelly said.
“This is really the job of the Board of Finance,” said Heiser.
“No doubt, an excellent school system enhances house values. That said, upwards of 80% of your tax dollars goes to education,” Heiser said — noting that his calculation included payments on school construction bonds.
Heiser said school spending should be looked at together with declining enrollment. He said that since enrollment peaked in 2005-06, the schools had 550 fewer students but “head count up 95 over what it was at the height.”
The finance board does sometimes trim school budget requests.
“It’s not a cut,” Heiser said, “it was a reduction in the increase.”
“There is a place for understanding the importance of scaling and efficiencies,” Freidenrich said.
“The Board of Education’s budget is very complex, very difficult to read,” said Moccia. “This is not criticism,” he added. “It’s an observation.”
Another question concerned the town $13- to $15-million “fund balance” — a kind of running, multi-year accumulation of annual surpluses — and the finance board’s practice of tapping into it and using some of the saved-up money as revenue to lower the tax rate. This is also the measure the finance board has used to keep the fund balance in the vicinity of 8% or 9% of the annual town budget, a goal it adopted as policy.
“Do you think leveraging the fund balance is a sustainable approach?” candidates were asked.
“Fund balance is not sustainable,” Raduazzo said, “especially if the state is going to allocate for $4 million in teacher pension costs to the town.”
Connelly said the fund balance could be thought of as “a rainy day fund” and that it’s something watched by the financial rating agencies that set interest rates the town must pay.
“It’s typically nine-ish percent of the overall budget,” Connelly said.
If the $4-million pension cost does get passed down from the state, Ridgefield could use its fund balance to foot the bill — “but not every year,” he said.
Connelly added that maintaining the fund balance helps the town keep its standing with financial rating agencies.
“It’s your money, not ours!” said Heiser. “The most efficient way to return it to the taxpayers is to take if off your tax bill.”
Freidenrich said it was testimony to the town’s good finances that the rating agencies were comfortable with a fund balance of about 9%.
“There are places in the Midwest that the rating agencies require them to have 30%,” she said.
It shows what the finance board has done. “I’m grateful,” she said.
“Oh!” said Moccia, “If the state rainy day fund was in as good shape as Ridgefield’s …
“We have to maintain our fund balance because it maintains our triple-A bond rating,” he said.
But with state aid cuts and the teachers’ pension issue coming, he thought the town will have a lot of financial work to do.
“We have to face the fact we’re in a problem — it’s going to require cooperation and compromise,” Moccia said.
Candidates were asked their views on the town’s long-term debt and pension obligations.
“The teachers’ pensions we’re talking about are run by the state,” said Connelly. “It’s different from the town pensions.”
The town, he said, hasn’t shortchanged the town police and firefighters’ pension it is in charge of, and has a history of making regular and reasonably large contributions.
“We’re not in any danger of not being able to pay our bills,” Connelly said.
Heiser began with a “shout out” to Dave Campbell, who headed the town’s Pension Commission for many years and regularly reminded finance board members of the importance of keeping up with contributions to the pension system.
“We’ve had independent auditors come in and they say we have very healthy funds,” Heiser said.
As for debt, he recalled “the bundle” passed in 2000 to pay for school expansion and renovation projects all over town, as well as the recreation center — and pushing the town’s debt total.
“We have judiciously been paying it down,” Heiser said. “We’re on track, we’re reducing that debt.”
Freidenrich said, “If the question is, should we back-peddle on commitments we’ve made to firefighters and emergency workers, the answer is no.”
As far as pensions for school employees, she said, “It’s really important the Board of Finance and Board of Education work together.”
“Pensions are a concern for everybody,” said Moccia.
The issues are whether it is “well-maintained and adequately funded, and are city employees treated fairly.”
But he thought Ridgefield is in pretty good shape.
“The pension funds are well-managed,” Moccia said.
Raduazzo echoed Heiser’s recognition of Dave Campbell’s diligence in the years he chaired the town Pension Commission.
“He did also track me down,” Raduazzo said.
He also recalled the school construction debt from 2000, which he said the town is whittling down.
“It was $120 million,” he said. “By 2020, it’s going to be under $50 million.”
What can be done to alleviate the tax burden on senior citizens with fixed incomes?
“One thing regarding seniors — such an asset to the town!” said Heiser. “There aren’t five or six kids we’re putting through the schools at $13,000 a pop. They’re the backbone of our philanthropic organizations.”
The town does offer a tax break to senior citizens, he said. (It’s $1,048 a year.)
Freidenrich said a “heating fuel fund” is also available to assist needy seniors.
“I prefer to be called a ‘seasoned citizen,’” joked the silver-haired Moccia, noting that he looked to be the only candidate who could make that claim.
“It is a concern,” he said. “There are people who are house-rich and cash-poor.
“They love this town. They want to stay here,” Moccia said. “We can’t tax them out.”
He said the town has a “circuit breaker” program available to alleviate taxes on households with income less than $40,000 a year.
“The best thing we can do for seniors,” said Raduazzo, “is deliver fiscally responsible budgets.”
“Obviously, seniors in this town are a huge part of our community,” said Connelly.
He pointed to the continued development of more diverse housing types catering to couples with grown children who might want to downsize. “There’s more and more housing opportunity for seniors,” Connelly said.
He, too, noted the town tax break for seniors and pointed to other benefits available, such as the town’s senior “Gold Card” offering discounts to town programs and at many private businesses.
This prompted Moccia to pull out his Gold Card and hold it up for the audience to see.
Candidates were asked about the town economy’s growth.
“Growth is a tough one,” said Freidenrich. “You want growth, and the tax base. On the other hand, growth brings more people who make more demands on the system.”
“We all know what traffic is like on 35,” said Moccia.
“The state is going to be redoing Main Street. Sounds good — but will it bring more traffic?” Moccia said. “We all have to be concerned about that: growth versus overgrowth.”
Raduazzo referred to the town’s efforts to foster “first-floor retail” on Main Street.
“I’d rather not see benefits go to landlords,” he said.
Raduazzo said he and his wife had tried to open a barber shop in town five years back, but were thwarted by high rents.
“We just couldn’t make it work in RIdgefield,” he said. “The landlords just weren’t interested to negotiate.”
“Growth can be good and bad,” said Connelly. “We don’t want to see a lot of traffic. We do want to see a lot of stores downtown.”
Growth is good for the tax base, he said, and noted that the town had done a study of potential growth in the Branchville area.
“How can we grow there — that’s not clogging up Main Street,” he said.
Heiser said, “Nine percent of our tax revenue comes from commercial taxation — most of that from Boehringer Ingelheim. The best thing we can do is hug Boehringer Ingelheim.”
He supported a plan the finance board had recently been asked to endorse, offering tax abatements to support new businesses coming to town and more first-floor retail downtown.
“Main Street businesses: They can’t all be real estate; they can’t all be insurance companies.”