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Town Councilor David Schrumm would like to promise residents a zero percent tax increase for the upcoming year, but that just wouldn't be realistic, he insists. In fact, making such a claim would be “irresponsible” and nothing more than “grand standing politically,” stated the chairman of the Cheshire Town Council Finance Committee.
“There will likely be a modest increase to fund services,” Schrumm explained, “but at the same time, we'll look to reduce expenses wherever we can.”
Last week, Schrumm laid out some of the challenges facing the Town as it prepares to debate the 2011-2012 budget. Town Manager Michael Milone has to present his budget to the Town Council by the charter-determined date of March 10, however, Schrumm said it could be released sooner. It's at that time Schrumm, and others, will know exactly the requested increase.
One particular number has already been established, that being the $63 million budget proposal passed by the Board of Education. Superintendent of Schools Dr. Greg Florio submitted his budget to the BOE on Jan. 27, asking for a 5.09 percent increase from the current fiscal year The BOE approved the budget and passed it along to the Town Council untouched. That increase is part of the reason Schrumm said cannot promise a zero budget.
“Before people come out and push for additional funds, we really have to go back and do some fundamental reassessment of how things are done,” Schrumm explained. “We really need meaningful cuts from the teachers union. Other unions have done it and the teachers have had back-to-back 4.4 percent increases.”
Schrumm stated that it was time for the teachers union to make concessions otherwise there would be programmatic changes and layoffs. The union negotiated a three year deal in the fall of 2008, right around the time the national economy began to collapse. The agreement includes both step and wage increases and while some teachers are getting less than 4.4 percent, others are getting more, leading to the average increase, Schrumm explained.
“They are insisting on another 4.4 percent increase, while simultaneously decrying potential cuts to staff and programs,” Schrumm said. “It's a classic example of cognitive dissonance. We cannot wait for a future contract to avoid layoffs and cutbacks.”
Another issue facing the Town is the uncertainty of the state's budget. Staring down the barrel of a $3.7 billion deficit, it is unclear how cuts to the state budget will affect the financial aid Cheshire receives. Typically, the state budget is finalized before the Town approves its budget, but those roles could be somewhat reversed this year. The issue of new taxes, reductions in state aid, and changes to how Payment In Lieu of Taxes (PILOT) programs are funded, could all affect Cheshire's bottom line.
“The unknown of the Governor's budget adds another layer of complexity. We might not know until our budget is close to finalized,” Schrumm acknowledged. “It might be a three-ring circus for the next couple of months until we hear from the state, but I'm reasonably hopeful that the reduction in state aid won't be as draconian as we thought.”
That being said, any cut from the state directly to Cheshire will almost certainly offset the limited growth seen in the Grand List. That zeroing-out means that “in all likelihood” the Town is starting at “less than zero” in revenue before the first meeting is even scheduled.
However, there are some positives, Schrumm explained, such as the debt service decreasing by more than $200,000 and healthy reserve funds from which to draw. Additionally, during last year's budget process, different accounts were created to help offset increased costs. Those accounts include $500,000 in a post-employment benefits, $500,000 in pension reserves, $500,000 for heart and hypertension claims, and $500,000 for the addition of a 27th payroll period.
“That should smooth out some of the things that are coming,” Schrumm said. “That will help during this process.”
Schrumm said “everything is on the table” once Milone submits the budget to the Town Council. When the Council starts analyzing it, they will start with the “long range, big picture” items, such as post-employment benefits and pensions. It is time to evaluate every department to see what can, and cannot be funded long-term and a plan for the long-term needs to be developed.
“Where's the plan? Why do we do some of the things we do?” Schrumm questioned. “Just asking for another five percent isn't going to cut it.”