Heading into 2018, Ledyard budget woes and potential supplemental tax loom
Ledyard — As the year comes to a close, it's increasingly clear the town's fiscal challenges will continue into the new year, and likely even the next.
Staring down a more than $1.5 million budget deficit brought on by cuts in state aid, and with the possibility of additional cuts on the way, the Town Council and Board of Education finance committees will host two more joint public meetings in January to discuss the town's options moving forward, including the increasing likelihood the town will need to send residents a supplemental tax bill. The first of these meetings will be Wednesday, Jan. 3.
"We got as much as we could, but now we're trying to determine if we need to do a supplemental tax," Mayor Fred Allyn III said. "We're still advocating and doing everything we can to avoid a supplemental, but I'm not supremely confident we're going to be able to do that."
After seeing more than $1.5 million cut in state aid, Ledyard scrambled to make up the deficit through a combination of furlough days and cost reductions both from the Board of Education and general town government. All in all, the school district managed to find more than $750,000 in savings, but savings found on the town government side were eaten in large part by an IRS ruling that affected the payout of the town's pension plan.
This left the town still staring down about a $750,000 deficit with little wiggle room after already tightly trimming its budget. And there is no guarantee that additional cuts in state aid aren't forthcoming.
The fear of additional cuts also is a driving factor in why local officials will not make a definitive decision on a supplemental tax bill and its rate until Feb. 1, which would be the deadline for setting a rate. However, this has not stopped the Town Council from working through the numbers of what the anticipated supplemental tax bill would look like.
With a significant gap to fill, town officials have worked the numbers for what a 1, 1.25 and 1.5 mill supplemental rate would look like for residents, said Bill Saums, chairman of the Town Council Finance Committee. The supplemental payment would occur once and, according to the committee's research, at a 1 mill supplemental rate, residents would be looking at about a $67 to $350 payment, depending on the assessed value of the house.
Although avoiding a supplemental tax bill is clearly preferred among officials, the harsh reality is that the town appears to have few alternative options.
"The cuts we are going to have to make at this point are going to be painful," Allyn said. "A town like this that operates lean and efficient, everything that happens comes at a cost and the residents will feel it."
Saums expressed a similar sentiment, saying that alternatives, such as dipping into the fund balance or using some of the extra money the town has set aside for health care, would only put the town at risk going into next year. And aside from that, other options to reduce costs are rather severe.
"Sure, we could cut more but when we cut, there will be deep cuts to services and the same is true of the Board of Education," Saums said. "We'll have overcrowded classrooms and it means drastic cuts in services on the town side."
Compounding Ledyard's fiscal challenge is the harsh reality that the reductions in state aid are unlikely to be isolated to just this year, thus the cuts the town is making now are going to carry into next fiscal year, as well.
"What scares me most is that next fiscal year could be even worse with the state," Allyn said, adding that the problem was many years in the making and could take equally long to get out of.
Both the town and the Board of Education still are exploring their other cost-reduction options, which will be the focus of next week's meeting, and the town is planning to send a delegation to plead the town's case to the governor.
But the joint meeting is not the only way residents can get involved and help address the current fiscal problems.
"We've had what I consider to be an unfair distribution of revenue cuts against Ledyard's favor," Saums said. "We've been as frugal as we could without harming education and reducing services ... we've also been very frugal with our capital investments. We have some money on hand and it appears that hurts us."
Saums said that it seems there was a perception that because Ledyard had low levels of debt and some cash stowed away for any maintenance needs, somehow the town was more equipped to handle the "brunt of the burden," similar to other towns that weren't struggling municipalities.
That's why Saums encourages residents to write to the governor and their legislators to let them know how the cuts are impacting the people of Ledyard.
Aside from voicing concerns, both Saums and Allyn said the single biggest thing residents can do to lighten the burden is recycle.
"As small as it seems, recycling more and throwing out less is a big deal," Allyn said. "We get paid per ton for recycling and we pay per ton for garbage. That's a big deal."
In fact, Saums said that changing the town's garbage habit could be the single largest savings on the town side — especially if the town switched to a pay-per-throw system.
Beyond those things, though, the next best thing may just be for residents to be understanding.
"The only other thing that could be helpful is understanding the situation we are in and learning to live within the confines of what we might see as the new norm," Allyn said. "That might come in the form of library hours and days that are adjusted, or school sports programs that may or may not exist."
"It is tough, but you kind of have to measure up the needs versus wants, and we've got to do that," he said.
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