Tri-board meeting: State budget, federal tax plan fuel town budget uncertainties
With a “dark cloud” possibly looming over the state’s finances, Ridgefield will most likely try to stay under a 2.5% spending cap that was imposed by the state last year.
“We’re going to have to come very close to that cap, or underneath it, to hold taxes under 2%,” said Board of Finance Chairman Dave Ulmer at the tri-board’s Thursday, Dec. 7, meeting. The meeting is held annually in the lead-up to planning the town’s budget for the next year, and brings together the Board of Finance, Board of Education, and Board of Selectmen.
A 2.5% increase in both the Board of Education and town budgets would translate to about a $3-million increase in spending for next year, Ulmer said.
It was unclear at the meeting whether the state’s cap had many teeth left in it, should the town expand the budget over the 2.5% limit.
“If the state still applies the 2.5% spending cap (which excluded things like a special education increase), they would reduce state aid by 50 cents for every dollar in spending over the 2.5% limit,” said Ulmer, in a follow-up email with The Press.
That reduction in state aid money would have to be made up in taxpayer dollars, he said.
“But it is not clear where the reduction (from which state funding account) would come,” he added.
The good news is that the town’s fund balance came in at around 10% of the total budget. “Our guidelines as a board are 8%-9%,” said Ulmer. “We’ve been trying to keep toward the higher side of that because of all the uncertainties.”
One part of what Selectman Maureen Kozlark called the “black cloud” looming over the town’s finances is the Republican-led tax plan currently making its way through Congress. In the long term, the bill could have far-reaching consequences for homes throughout Fairfield County, said First Selectman Rudy Marconi.
“People will be limited to a $10,000 tax write-off, there will be no write-off of your state income tax, and no write-off of your interest on your mortgage,” Marconi said. “It’s gonna hurt. Where our concern lies is that when people begin to lose those deductions … we’re anticipating there being a lot more appeals [of home values], and a lot more controversy over our taxes.”
Marconi said the tax plan would compound some of the state’s other financial woes, such as a depressed market for high-end real estate. “For a lot of years, we were able to see a lot of income out of the million-dollar homes being built and sold, but that’s a thing of the past at this point,” he said.
Members of the Board of Finance also said that aid from the state could very easily be cut again in the next year.
“Every dollar that they don’t give us is a dollar we have to try to figure out — without burdening the taxpayer,” said Board of Finance member Dick Moccia. “The state considers us an affluent town, but not everybody in Ridgefield is affluent.”
The federal tax plan would especially hurt moderate income residents, Moccia said, particularly those who make more than the “circuit-breaker” of $40,000 a year.
The town is still holding off on filling several open positions — including a police officer — since a town budget freeze went into effect this past July. The continued freeze should give the town a “cushion” of about $300,000, Marconi said at the tri-board meeting.
That could help offset any more cuts in state aid.
“The state did come through with a cut not too long ago, and my feeling is we’re going to be seeing another one,” Marconi said.
Where the cut might come from, Marconi could not say. “The good news is there’s not much more they can take out of us,” he said. “But we’re still to the good, and our overall position is strong.”
“The decline in enrollment was not as great as projected,” said Board of Education Chairwoman Fran Walton. “I think we have only a drop of 30 students overall.”
The biggest change from years past, Walton explained, is that home sales are now driving kindergarten enrollments as much as the town birth rate. She said that “48% of the kindergarten class now were not necessarily born here in Ridgefield. If you look back about 10 years, the trend was that the majority of families moved here, then had families, and you could trace children from birth to enrollment in our kindergarten.”
Between January and September, “nearly 70% of the families that moved into the system brought elementary-age children to the system,” said Superintendent Karen Baldwin. “So that’s a real feel-good story — that’s an exciting opportunity for us.”
“The budget’s going to be built off those enrollment projections and class-size maximums,” Walton said. “I think we’re very proud of our class sizes, and the way that that translates into what the Ridgefield Public Schools offers to the taxpayers, and I think that’s one of the drivers for this next year.”
But with the state’s financial picture still in question, members of the Board of Selectmen appeared to emphasize restraint.
“There’s a lot of things that we talked about,” said Kozlark, “the federal tax problems, the state is having tax problems, I mean, there’s just so many outside variables that we can’t control that are going to come down on us that we have to control what we can here in our town with our budgets.”