Federal tax plan has town aiming for flat budget, health insurance bloc
A federal tax plan signed into law in late 2017 has First Selectman Rudy Marconi concerned — and has the town aiming for a 0% budget increase and considering a measure to create an alliance with other towns for leverage against the insurance industry.
The new tax law was one of the first issues raised by Marconi in his state of the town address, which he delivered at the League of Women Voters’ annual Alice Paul Day Tuesday, Jan. 8.
“You’ve all heard about the new federal tax law?” Marconi asked the crowd of around 25 people gathered in the lower level conference room of town hall. “Our area of the country is gonna get hit.”
The law caps deductions of state and local deductions from a filer’s federal income taxes at $10,000. That means the average Ridgefield taxpayer will have about $11,000 in state and local taxes they won’t be able to deduct when they file their federal returns.
With that in mind, Marconi said he is hoping to keep the town side of the budget flat with no increase in the next year.
Marconi’s budget proposal does not include the request from Ridgefield Public Schools, which could be seeking a budget as high as $99.7 million — a 5% increase over this school year — for the 2019-20 school year. Interim Superintendent JeanAnn Paddyfote will present the district’s budget on Monday, Jan. 14.
Marconi said the 0% increase for the town’s budget would mostly be paid for by about $600,000 in reductions from salaries for town employees, after 13 employees took the town up on an incentivized retirement offer.
Three other town employees were also laid off.
The bonus paid out 75% of a worker’s annual salary if he or she retired by Aug. 31, 2018.
“We had enough money in the salary line to cover that [payout],” Marconi said.
“Our budget’s $32 million, so a 2% increase is about $600,000. If we can look at bringing those costs and balancing one against the other, we’re hoping that we can deliver that zero,” Marconi said.
“Bottom line: We want to try to keep any tax increase at a minimum,” he added. “I think absolutely under 2% — [we do] not want to exceed, but it’s really going to be dictated by the Board of Education,” he added.
Increasing health insurance costs — for both school and municipal employees — are still unknown.
Paddyfote has said the district’s insurance carrier could increase costs by as much as 20% — $4 million, Marconi pointed out.
“Insurance is a big, big issue for all of us,” he said.
One possibility could be to rope the town’s insurance plans together with the 17 other communities in the Western Connecticut Council of Governments (WestCOG), which would give the town more leverage with health insurance providers than it does on its own.
The group spans the western side of the state, south from Sherman down to Greenwich and over to Westport.
“And everyone in between” first selectman said.
The council put out to bid “to have companies come in to begin looking at forming a COG health insurance program that all municipalities can be a part of,” Marconi said.
The town currently has about 1,000 employees on insurance, he said. Joining with the other towns could create a buying group somewhere in the neighborhood of 18,000 municipal employees.
“It gives you a lot more leverage than little Ridgefield,” Marconi said. “You have to keep working and fighting that industry.”
The first selectman sees two immediate outcomes from the new tax law.
The first is that people might begin cutting back on philanthropy — donating to organizations in need. “If people are paying more in taxes, they may cut back,” Marconi said.
The second possibility is that more and more residents will contest the town’s assessment of their home.
“They’re going to appeal the value of the property tax,” Marconi said.
“They can write letters all day long to the IRS or whoever — their congressman … You can come here to town hall and argue with Al Garzi, and people will do that,” he added, referring to the town assessor.
The town is also moving ahead with plans to move the Board of Education offices from their current location in the town annex into the Richard E. Venus building — the old high school — next door.
Doing so will accommodate two of the town’s tenants: the Ridgefield Playhouse, which will expand into the Board of Education’s former space, and Chefs’ Warehouse, which will expand into the second floor of the Venus building.
Expanding Chefs’ Warehouse will net the town around $600,000 in increased rent, Marconi said. “They are a great corporate partner” for the town, he added.
The town is also moving ahead with a state-sponsored plan to revitalize Main Street, which, after initial plans for widening the main throughway drew objections from townspeople, has been reduced down to “pretty much a curb-to-curb” plan, Marconi explained.
The main advantage of the project will come from realigning the Prospect Street intersection with the entrance to the CVS parking lot, which “is the source of all of the congestion on Main Street,” Marconi said. Traffic will still probably slow during peak hours but “it will move and we won’t see the backups … I hope,” he added.
Fracking and solar
Marconi talked briefly on two subjects that have touched off debate in the community — a proposed ban on waste from natural gas fracking, and the use of home solar panels.
Voters will decide on whether or not to adopt a town ordinance to ban waste from fracking — the use of high-pressure liquid underground to extract natural gas or oil — at a town meeting on Wednesday, Jan. 9. But Marconi raised concern about some of the language in the proposal, which would force suppliers to the town to certify that their products — asphalt to patch town roads for example — do not contain fracking waste under penalty of perjury.
As for solar energy, Marconi said he’s attempting to negotiate a dispute between two neighbors on Canterbury Lane, where a family moving in has approval from the town to construct an array of solar panels.
The array being built will be in plain view of the abutting neighbor’s pool.
“I’m in the middle of that … hopefully we can work that out,” Marconi said.
He suggested a future ordinance might lay new ground rules to reduce the impact of solar panels — nothing in the front yard, and a rule ensuring proper screening.
He closed with a quote from President Lyndon Johnson, emailed to him by one of the neighbors involved.
“In the darkest hours of his presidency,” Marconi recalled, “[Johnson] turns to his aide and says ‘Well it could be worse — at least I’m not the mayor of a town.’”