New London passes budget, hopes for state relief

New London – Nearing a spending deadline but still without state fiscal guidance, the City Council on Monday passed a revised budget that contains deep cuts but little tax relief.

The $84.99 million spending plan passed on Monday is a more than $5 million reduction from the $90.05 million budget passed in May and, along with eliminating four city positions, it slashes the school budget by $4.2 million, removing any tax increase associated with education spending.

Taxes will still rise by 8.98 percent, instead of more than 9 percent, under the plan, though the city is still counting on some tax relief once a state budget is passed. The council repealed its $90.05 million budget in September while awaiting a state budget that never materialized. Instead, the city is budgeting for an unprecedented drop in state revenues and guessing on final state budget figures.

The council cut the school budget based on projections contained in a vetoed state budget that would reduce Educational Cost Sharing grant funds to the city by as much as $5 million. City and school officials alike, however, expect that when a state budget is finally passed that some if not all of those state funds would be restored in some form.

Mayor Michael Passero said the danger in not passing a budget with the reductions was that, under City Charter, the city could not go back into the approved budget and make education cuts.

It doesn’t mean school district supporters are not nervous about further educational cuts, however. A crowd came to a City Council meeting last week to condemn the council's proposed school budget reduction.

Interim Superintendent Stephen Tracy, at Monday’s council meeting, said the school district looked forward to working with the city to avert a fiscal crisis.

"We are accepting reluctantly the notion of a zero increase on the school district side with respect to city funds," Tracy said. "We appreciate the fact you were able to at least hold us even to what the district was able to spend last year."

City funding toward the school budget is $37.5 million under the approved spending plan, an 11.7 percent reduction from last year. The $47.5 million general government side of the budget is a 3.4 percent increase from last year.

Taxpayer funds will account for about $19.4 million of the school district’s overall $68 million budget — the same amount as last year. The rest of the district’s budget is funded with a combination of ECS funds, state and federal grants, all of which are trending down this year, Tracy said.

Tracy and members of the school board have called for the return of some of the $500,000 the council eliminated from its own budget that had been used for school building maintenance.

The unanimous decision to pass a reduced budget fulfills a citizens’ petition calling for lower taxes.

Councilor Martha Marx, the chairwoman of the council’s finance committee, called the cuts, especially those that would lead to city layoffs, “painful,” but said the city is at the mercy of the state this year.

"This has been a budget like no other, one I hope I will never have to see again," Marx said. "I am very confident that when we get a state budget ... we will be able to lower taxes even more."

Part of the reason the city did not wait for solid state budget figures before passing its own budget is that the city is close to spending 25 percent of its budget. When the council repealed its original spending plan, the city automatically reverted to last year’s budget. That budget would stay in effect if they reached the 25 percent threshold.

Councilor Anthony Nolan said the council has started to build a relationship with the school district and he pledged, along with the other councilors, that any extra ECS funding from the state would be immediately shifted to the school budget.

The city has yet to officially set a new tax rate and is likely to wait on solid state revenue figures before doing so, Passero said.

g.smith@theday.com

 

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