Trumbull finance board keeps taxes flat, members worry about next year

TRUMBULL — The Board of Finance achieved its goal of passing a 2020-21 budget that did not increase taxes. But even as the members voted, they acknowledged that they were setting themselves up for a challenging budget process next year.

“Next year, we’ll have a lot of problems to solve that we’re creating this year,” said Vice Chairman Paul Timpanelli during the June 8 meeting. “But this year, clearly, is the time to do what we’re doing.”

Martin Isaac agreed, calling 2020 “an extraordinary year” and stating his hope that the town and taxpayers would have a better year next year. The comment prompted Steven Choi to quip that “2021 has to be better” than this year.

By a party line vote, the board set a mill rate of 34.74 for next year. That means a resident with a house assessed at $300,000 would pay $10,422 in taxes. Democrats Isaac, Timpanelli, Lainie McHugh and Michael Barker supported the measure, with Republicans Choi and Elaine Hammers opposing. The Republicans had said they wanted spending to remain at 2019-20 levels.

Spending, though, will increase about 1.7 percent from the current year, to $178.4 million. The difference was made up by dipping into the fund balance for $2.8 million, and front-loading interest savings on some bond refinancing.

McHugh, the board chairman, said the budget delivers on the principles that the board outlined earlier in the process, which were laid out by First Selectman Vicki Tesoro: Prioritize public safety and education in the budget, and avoid imposing new taxes on residents struggling with an unprecedented economic downturn.

“Unemployment is at an unprecedented high,” McHugh said. “Businesses have been closed for months. Some of them may not reopen. To raise taxes now would be counterproductive.”

The Republican proposal to keep spending the same as this year was never an option, according to McHugh and Tesoro.

“I would never support the kinds of devastating cuts other towns gave their schools,” Tesoro said. “If Hammer’s motion had passed, the schools would have received zero. Instead, the Board of Education was given a $2.9 million increase.”

The 55-minute meeting consisted mainly of board members reviewing Finance Director Maria Pires’ accounting and fiscal projections. Hammers commented that some projections, such as car tax revenue and tax lien fees, seemed optimistic.

“Do we really think in this economy people are running out to buy new cars?” she asked.

Hammers also questioned the tax collection rate, which Pires reported was at 97 percent as of June 4. Hammers said she expected that rate to fall considerably next year.

“I think there’ll be more people unable to make their tax payments,” she said. “I think the first quarter is going to be abominable.”

Choi also expressed reservations about the town using one-time allocations to keep the mill rate flat while increasing spending, including a $2.9 million budget increase for the school system.

“It’s a difficult year, I understand that,” he said. “I think we need a forward-looking approach.”

McHugh agreed with Choi’s sentiments, if not his solution.

“We really felt we needed to give the Board of Education an increase this year, and to do it without burdening the taxpayers,” she said.

Tesoro said the town was in a sound fiscal position to use some of the fund balance to cover the difference between expenses and revenue, pointing out that two global credit rating agencies, Fitch and Standard and Poor, had affirmed the town’s AA+ rating last week. This signifies a high level of confidence that the town is financially sound and has adequate revenue and cash reserves, she said.

Hammers said the town has taken the steps of allocating fund balance to offset tax increases before, and has taken reduced interest payments up-front before, but she worried about the cumulative effect of doing both the same year.

“But it is a rainy day fund, and if it ain’t raining now, I don’t know when it will be,” she said.

Timpanelli said he was hopeful that anticipated Grand List growth and an improved economy, combined with lean budgeting next year, would negate a so-called funding cliff next year.

“We understand that we’ll have to work harder for next year, but this is the time to begin that work,” he said.