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Lyons: Malloy’s cut to Norwalk is more like $9.6 million

Norwalk Mayor Harry Rilling, left, and Board of Education Chairman Mike Lyons, right, at a BoE meeting in August.

NORWALK, Conn. – The reduction in state funding to Norwalk under Gov. Dannel Malloy’s executive order is more than $9 million, Board of Education Chairman Mike Lyons said Sunday.

The $5.7 million cut quoted by Finance Director Bob Barron on Friday did not include cuts in education funding, Lyons said, specifying an expected $3.9 million reduction on the BoE side of the equation.

Add those together and it’s a $9.6 million reduction.

While Barron said Friday that the city could withstand a $5.7 million blow to the “Rainy Day Fund” without endangering its triple A bond rating, Mayor Harry Rilling on Sunday had a different reaction to a potential $9.6 million cut in total funding. “A cut of that magnitude would be extremely difficult to absorb,” Rilling said in an email. “We will continue to monitor the situation in Hartford to determine the impact on our community. As the budget situation unfolds, we will explore the options available to offset any reductions in our state revenue. The main focus will be to protect our taxpayers from having to bear the burden.”

An analysis of Malloy’s executive order by the nonprofit Connecticut School Finance Project, a nonprofit self-described as a “nonpartisan and independent source of accurate data and information,” shows that Norwalk would lose nothing in educational cost sharing funds under Malloy’s order, but would lose $4.2 million in other education funding.

“The School Finance Project numbers, we’re finding, are often wrong,” Lyons said in a Sunday email. “We try to get our data directly from our legislators.  The latest we have based on {Norwalk Public Schools Chief Finance Officer} Tom Hamilton’s analysis of that data is that the schools will lose a total of $3.9 million under the executive order (so we’ll get about $1 million less per quarter than anticipated). This is Alliance and other grant funding not included in the ECS.  It is correct that Barron isn’t including that $3.9 million in his number.  For the City to cover BOTH its state funding cut AND ours, it would need to make a ($9.6 million) draw on the rainy day fund. Not good.”

The Rainy Day Fund had $47.4 million in it at the end of the last fiscal year, on June 30, about 13.3 percent of total revenues, according to the Comprehensive Annual Financial Report.

Norwalk’s fund balance policy mandates that it be 7.5 to 15 percent of revenues, with a fund balance at least at the level of the median of other Aaa-rated communities in Connecticut.

Norwalk’s fund balance was 12.1 percent of GAAP (generally accepted accounting principles), Barron said in February; the median was at 11.5.

NancyOnNorwalk’s Friday story stemming from Barron’s press release drew swift condemnation from Board of Ed Finance Committee Chairman Bryan Meek, who, in a comment on NoN , questioned whether City administrators were changing the criteria for dipping into the rainy day fund for political purposes:

“Remember the acrimony and name calling when it was suggested we use rainy day funds to help finance the population growth in our schools?

“That was all over a few million and it took months to wring out.

“Fast forward to today and forking over $5 or $10 million out of the rainy day fund is no big deal. After a few days of digesting the Governor’s veto without any discussion from the council or the BET in public we have the conclusion that we can raid the rainy day fund. {…}

“What has changed that dramatically? Where is the revenue report to justify this? Who’s direction was it to reach this conclusion less than two days after the Governor’s announcement?

“When it comes to funding the needs of the school system, we need months upon months of drama and back and forth inanity.

“When it comes to making sure there is a soft landing for the election, these kinds of decisions can be made almost overnight.”

State Senate Majority Leader Bob Duff (D-25), speaking to Norwalk reporters last week, said that Malloy has promised to hold Alliance Districts harmless, quoting him as saying, “Norwalk will be fine.”

Duff did not reply to a Sunday evening email asking about the $9.6 million reduction.

The “bipartisan budget” passed by the Connecticut legislature maintained Norwalk’s funding for this fiscal year, according to State Rep. Gail Lavielle (R-143).

Rilling joined Duff at two press conferences last week, supporting the governor’s veto of that budget, first because of cuts to higher education and second because of a “secret teachers tax,” a requirement that teachers contribute 2 percent of their pay to a pension fund.

“I do not support the veto per se,” Rilling said Sunday. “I was opposed to the 100’s of millions of dollars removed from our state’s higher education. If we are to remain competitive in the global economy, we must invest in our higher educational system…. I did not support the tax on teachers. I do not support the cuts to our higher education system.”

Malloy, in a Thursday interview broadcast on CTN, listed reasons for vetoing the budget, including an assertion that the teachers’ contribution to their pensions would be illegal, as the money would go into the general fund. The illegality of that would cost Connecticut “100s of millions of dollars,” Malloy said.

Lavielle on Tuesday denied that it would go into the general fund.

Malloy on Thursday said, “The executive orders are not a budget. They are temporary steps that we take to make sure that the state doesn’t spend more money than we can reasonably predict that we take in…. I very much want a budget.”

A chart provided by Norwalk Finance Director Bob Barron in December.

11 comments

Sue Haynie October 2, 2017 at 6:31 am

Mayor Rilling called for a veto of a bi-partisan budget that would have spared Norwalk funding cuts but, he still advocated for a veto. He knew, or certainly should have known, that a veto would have resulted in a $9M hit to Norwalk.

Now that the veto is a done deal, he’s trying to wiggle out of it and it just won’t work.

Rilling put the interests of lobbyists, politics and party ahead of Norwalk and the Norwalk taxpayers who have paid his salary, his Assistant Mayor’s salary and his great benefits.

Vote LISA. Norwalk needs a fighter for a change.

Josh Ornstein October 2, 2017 at 7:28 am

It seems like the council and finance board need to act quickly to avoid this drawdown and collect the appropriate taxes

Drewt October 2, 2017 at 8:02 am

Once again Thank You Dumbbell A** Malloy and Clueless Bob for this financial disaster you have put us in! And to be fair I should add the rest of most of the Democrats in Hartford as well. They have been the one rubber stamping all of past budgets of disaster! Well, now what Dan & Bob? You have Vetoed a Bi-Partisian Budget for what reason exactly? Our only change is if we ought legislatures get a quick clue and see how bad not having this Budget really is and vote to override. I would start praying now!

Education101 October 2, 2017 at 8:51 am

Collect the appropriate taxes?? Don’t think so. Time to face the reality and cut, cut, cut! Sharpen the knives folks. The city can not afford a mass exodus of its tenuous residential tax base of which most don’t have children in the school system. Their shared sacrifice has reached the limit. Time to think outside the box. More fees anyone?

Donna Smirniotopoulos October 2, 2017 at 9:11 am

If Mayor Rilling was not “against the veto per se”, then why did he participate so publicly in Duff’s theatrics last week? NCC was not on the chopping block. The “secret teacher tax” was a phased-in requirement that teachers contribute more to their own retirements. Significantly, though Rilling now appears to be saying he did not ask for a veto, he did nothing to encourage a compromise budget or a signature from Malloy.

carol October 2, 2017 at 9:42 am

if people vote for duff again,they are getting what they deserve. he gives no support to norwalk. we do not need more photo ops.

Isabelle Hargrove October 2, 2017 at 10:06 am

Our State is facing financial insolvency and Norwalk is battered by the fallout. But all mayor Rilling does is play political games, only worried about getting re-elected.

The “I do not support the veto per se,” comment from Rilling should outrage even his most staunch supporters. Stop hedging your bets, stop the two-faced games. Rilling took a stand against Norwalk to support his party politics. Now, he doesn’t even have the courage to stand by his choice.

Are Norwalkers ready to elect leaders with integrity, transparency and who will put Norwalk first?

Marc D'Amelio October 2, 2017 at 11:15 am

The article states Mayor Rilling said “I do not support the veto per se.” When are we going to start to hold our leaders feet to the fire and not let them play both sides. Either you support the budget and or veto or you don’t. I attended the NCC event where the democratic leadership clearly opposed the republican bipartisan budget and supported Governor Malloy’s veto. The simple fact is if the budget were signed by the governor Norwalk would be in a better place today. Our local leaders should have done everything they could to persuade the governor not to veto.

Marc D'Amelio October 2, 2017 at 12:15 pm

As it relates to UCONN:

I graduated from UCONN, and I bleed Husky Blue. I appreciate, and in the past have supported, the massive state investment in UCONN but we are now in the midst of a crisis. I think excessive cuts are dangerous but not as harmful as excessive spending. Maybe Susan Herbst needs to do a better job controlling expenses and looking for ways to adequately manage the budget. I did a quick analysis on the University of Michigan (ranked # 4 US News and World Report Ranking of Public Universities), and it appears that the State of Michigan gives U of M, at Ann Arbor $316.1 million in annual funding. The entire UCONN system (not including the health center) was slated to receive $388 million before cuts and now $309 million. The decrease does not appear as it would cause the decimation of UCONN that President Herbst described. I would imagine UCONN could “survive” on the equivalent funding as the #4 ranked public university in the country.

I would love to examine a side-by-side comparison of UCONN next to the entire US News and World Report Top 20 Public Universities. How do we compare in significant categories of total student enrollment, in & out of state tuition, endowment, professor salaries, class size, contribution to athletics, etc.? My guess is Connecticut’s funding of UCONN would be close to the top.

Donna Smirniotopoulos October 2, 2017 at 12:28 pm

The Mayor was asked to support the budget or at least support some effort at compromise right here on NoN. Perhaps he doesn’t keep up with NoN comments, in spite of the input of his minions. The incumbent candidate for Mayor of Norwalk had a choice last week—to encourage Governor Malloy to sign the budget for the sake of the City; to encourage democrats in Hartford to consider the offer from supporters of the budget to revisit some of its provisions; or to publicly protest the budget and make misleading and false statements in front of the cameras, pandering to our youngest voters—NCC students—and to our teachers, who are lead by wife of Mayor Rilling’s treasurer. Mayor Rilling took the 3rd road. There is no more convincing argument than this to vote him out of office.

Bryan Meek October 2, 2017 at 5:25 pm

@Marc D. Great analysis on the Uconn budget. I too bleed Husky Blue, but maybe we need to right size this ship before it sinks. Maybe now is the time to merge both Uconn and CSU systems and be more efficient. Apart from that, it is pretty incredible that those who have the ability to lead this city have forked over the keys to the people driving us into a ditch. What do we do next year when there is a $20 million hole after the next oops in the budget? A lobster and oyster boat ride photo op might be in order to spin that one.

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NancyOnNorwwalk.com was conceived as the place to go for Norwalk residents to get the real, unvarnished story about what is going on in and around their city. NancyOnNorwalk does not intend to be a print newspaper online; rather, it exists to pull the curtain back and shine a spotlight on how Norwalk is run and what is happening regarding issues that have an impact on taxpayers’ pocketbooks and safety. As an independent site, NancyOnNorwalk’s first and only allegiance is to the reader.

About Nancy

Nancy came to Norwalk in September 2010 and, after reporting on Norwalk for two years for another company, resigned to begin Nancy On Norwalk so she engage in journalism the way it was meant to be done. She is married to career journalist Mark Chapman, has a son, Eric (the artist and web designer who built this website), and two cats – a middle-aged lady and a young hottie who are learning how to peacefully co-exist.