New London tries to hold tax rate hike to 2 percent

New London - The City Council Finance Committee will continue paring down the proposed 2012-13 budget request on Tuesday, aiming for a 2 percent increase in the tax rate, rather than the 20 percent proposed by the mayor.

"The goal of the finance committee is to work it out to about a half-mill increase,'' said Council President Michael Passero, who is also chairman of the Finance Committee.

To date, the committee has cut about $1.5 million from Mayor Daryl Justin Finizio's proposed $87 million spending plan. The mayor's budget, which is a 6.4 percent increase in spending, if passed as proposed, would mean a 5-mill increase in the tax rate to 30.28 mills.

On Tuesday, the council will continue its review of departments, starting at 5 p.m. with the Recreation Department, followed by Public Works, Ocean Beach Park, the Pension Fund, City Council and various other city departments. The committee will also revisit the budgets for the police and finance departments.

City Councilor Adam Sprecace, who is also a member of the Finance Committee, said he is viewing the review of department budgets as fact-finding sessions. He said he plans to return to each department and find further cuts in necessary.

"We still have a long way to go,'' he said Friday.

So far, the committee has reduced the fire department's request by $400,000, and taken $400,000 out of the school budget and $400,000 from debt service after refinancing some loans, Sprecace said.

Other reductions have come from the Office of Development and Planning and from the building office and smaller cuts in other departments.

"We've done a lot of work trying to keep taxes at bay,'' Sprecace said. " ... but there is going to be have to be some level of increase. I think taxpayers understand that."

Councilor John Maynard, the third member of the Finance Committee said he's confident the committee will find ways to keep the increase down to a half-mill increase.

"We're going to get there,'' Maynard said.

He's looking at the municipal budget the same way he manages his personal money.

"It's like I'm doing my bills at home,'' he said. "Do I need this? Can I afford this?"

Maynard has also proposed the city put out a request for qualifications for a firm to conduct a forensic audit of the current year's finances. The item has been sent to the finance committee for discussion but has not yet been reviewed.

Maynard said he wants an audit, or least see how much one would cost, to find out exactly where and how the city's money is being spent.

"I put it out there, not put the blame on anyone,'' he said. "There's been so many rumors about the numbers out there and how much we're in debt. I think we should find out where we are and let's move the city forward.

"Unless we do a forensic audit, we'll keep pointing fingers at each other,'' he said.

The mayor announced in January that the city was facing a $12 million shortfall in its finances over a three-year period. Last year's budget had a $1.3 million deficit and in January, Finizio was predicting a $4.4 million deficit in the current year's budget and another $4.5 million would be needed for next year's budget. He also said money taken out of fund balance to cover the deficits would have to be replaced.

The current deficit has been reduced by about $1.4 million and is now hovering around $3 million. There are still three more months in the fiscal year and the deficit may go down even more.

When Finizio released the proposed 2012-13 budget earlier this month, he promised to veto the spending plan if the council "significantly reduces this budget based on revenue over-inflation, or deliberate under-budgeting of legally mandated line items."

Under the City Charter, the mayor has the authority to veto the entire budget or portions of it. The council needs six of seven votes to override a veto.

The council has until May 1 to approve a budget and the mayor has 15 days to act on it. If no action is taken the budget is passed to the Board of Finance, which will hold hearings on two appropriations: one for the schools and one for municipal government.

Residents can also petition for a referendum for either the school budget or municipal budget, or both.

By law, the city must have a budget in place by July 1.


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