Updates, 1:17 p.m.: Minor copy edit.
NORWALK, Conn. – Norwalk’s shortfall in funding coming out of the recently approved state budget is about $1.8 million, Finance Director Bob Barron said Monday.
That’s $1.1 million on the city-side, and $700,000 on the Board of Education side, he said, emphasizing that it’s difficult to nail the numbers down because of various unusual mechanisms used by the state.
Mayor Harry Rilling, at the Board of Estimate and Taxation meeting, again said that Norwalk residents will not be receiving supplemental tax bills to make up for the shortfall. But the tax board doesn’t necessarily need to draw down the money from the Rainy Day Fund, either, he said.
“What I would caution this board is that you don’t jump immediately into that and say, ‘OK, let’s draw down $2 million dollars,’” Rilling said. “As we move forward, we look at the expenditures that are necessary, what services are absolutely necessary, and if we need a special appropriation from the Rainy Day Fund – or the reserve what are you want to call it – then we can make those adjustments as we go to the fiscal year. Rather than jumping all in… We don’t know how the expenditures are going to go over the next year.”
BET member James Feigenbaum expressed some confusion about Barron’s press release earlier this year that Norwalk would have a $5.7 million shortfall under the governor’s executive order.
The governor’s executive order was only effective until the legislature passed a state budget and either had it signed by Gov. Dannel Malloy or overrode a veto.
Malloy signed the new budget last week.
One reason Barron was hedging a bit was that sometimes the state says it will provide a certain level of funding but then will fall short, he said.
So if the state said it would fund Norwalk with $1 million in Fiscal Year 17 but only provided $800,000, it can say it increased funding in FY18 if it provides $900,0000, he said.
State statutes specify $4.9 million for Norwalk from the municipal revenue sharing grant but the state only delivered $3.4 million, he said.
“All of these grants are subject to the state collecting enough money to fund them. If the revenue projections are off we will make cuts. In years past those cuts were very small. In recent years, it’s been a little schizophrenic,” Barron said.
The state eliminated the LoCIP (Local Capital Improvement Program) and the transportation grants last year, Barron said, clarifying that LoCIP is a capital expense.
“All of those cuts were in fact offset by increased tax revenue collections and increased building permit collections,” Barron said. “Remember we got that big check for the mall toward the end of the fiscal year.”
On the flip side of the coin, Barron said he found a municipal gaming grant in the budget specifying $750,000 for Norwalk. There’s a municipal assistance grant that hasn’t been on the budget in years, but the approved budget provides $2.2 million for Norwalk with that label, he said.
Norwalk Public Schools Chief Financial Officer Thomas Hamilton said the state distributed 25 percent of the Board of Education Alliance grant money to the city. That’s another level of uncertainty, as perhaps the BET will need to give that funding to the BoE via a special appropriation, he said.
Barron said he doesn’t want to release a figure for how much is in the city’s unassigned fund balance, or Rainy Day Fund, until an audit of Fiscal Year 17 is completed in a few weeks, but doesn’t expect it to change much from the $47.4 million that was reported at the end of Fiscal Year 16.
BET member Anne Yang-Dwyer asked if the $1.8 million shortfall could be covered by reducing expenses.
“As you know the budget is very dynamic, it is not static,” Rilling said. “Things happen during the year unanticipated… sometimes there is going to be savings or greater revenue that we didn’t anticipate. So this board I would expect will be looking at the budget at each time we come to this table and sit down, and say, “What do we need?’ One thing I have said we will not do is send out any supplemental tax bills. We won’t do that. The money in the Rainy Day Fund clearly belong to the citizens of Norwalk. We want to make sure that we don’t have an abundance in the Rainy Day Fund at the expense of the homeowner.”
“They are not getting an additional tax bill and we will continue to look at every line item as we do each and every month from the BET standpoint to see where we can identify possible savings that could go against the $1.8 million,” BET Chairman Greg Burnett said.
Rilling said he wants to meet with NPS administrators.
“We want to make sure we understand their situation as well,” Rilling said. “We want to make sure we give the school board the money that they need in order to operate. I have made that commitment in the past as well and I don’t want to back away from that commitment.”