With stimulus funds uncertain, Trumbull delays budget vote

Board of Finance Chairwoman Lainie McHugh opens the March 20 budget hearing with the Pledge of Allegiance.

Board of Finance Chairwoman Lainie McHugh opens the March 20 budget hearing with the Pledge of Allegiance.

Zoom screen capture

TRUMBULL — The Board of Finance has delayed voting on the 2021-22 budget due to uncertainty over federal funding.

The vote has not been rescheduled, but Chairwoman Lainie McHugh said it would likely take place within the next two weeks.

“We hoped to push it back two or three weeks to get some more direction, but the last word we have is that the information should be available within 60 days,” McHugh said. “We have to present a budget to the town council by April 26, so we hope to vote by the 20th or the 21st. If we don’t have any more information by then, we’ll just have to take our best guess.”

Over the next two years, Trumbull is expecting about $12 million in funding through the American Rescue Plan. Of that total, about $2 million is allocated for the schools, and the rest to the town. But questions remain about how the town can use the funds.

“The only guidance we have is that we can’t give a tax cut with the funds,” McHugh said.

But what exactly would constitute a tax cut? First Selectman Vicki Tesoro said she was seeking more clarity on that since funding any municipal expense with stimulus money would result in a lower tax rate, and therefore, could be considered a kind of indirect tax cut.

In addition, she said she would prefer to see the town use federal funds for one-time expenses.

“You can’t pay your pension obligations with it (stimulus funds) because that creates a huge funding cliff,” she said.

A funding cliff occurs when municipalities use one-time funds to pay ongoing expenses like salaries. The following year, without those one-time funds in the budget, the town would have to increase its budget to cover two years of cost increases.

As the largest single expense in the annual budget, the schools could be a primary beneficiary of the federal funds. The proposed 2021-22 school budget is $112.3 million. This is a 3 percent increase from the current year, but about $450,000 less than the Board of Education requested. Tesoro said she reduced the proposed allocation based on health care cost projections that came in lower than expected.

McHugh said part of the reason for delaying the budget vote is that the finance board was waiting to see how the federal money could be used to help the schools without creating a funding cliff. Whatever the final school budget the board recommends, it will be at least as much as Tesoro recommended, McHugh said. If the town is able to use its stimulus money to support the schools, the total allocation to the Board of Education may be close to what the board requested.

“Nobody supports reducing the budget,” she said. “It is my hope that the things the school board wants to do will be funded.”