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Losing Sight of the Bigger Picture

After reading about Norwalk’s 2024-25 operating budget discussions, it’s fair to conclude the city’s Common Council occasionally has a tough time distinguishing the forest from the trees. Let’s begin by going back two years.

Opinion

In the spring of 2022, the local media carried stories about Norwalk’s capital budget that caused me to scratch my head. A sustained debate took place among members of the Common Council on whether to move $112,000 from the Department of Public Work’s fleet management account into the Police Department’s unmarked vehicles account to purchase three new vehicles. The motion was soundly defeated. Two aspects of this debate struck me:

First, this was a $41 million capital budget. Why focus on such a small item that would probably be funded regardless of what the Council did? (Several months later, the vehicles were funded.)

Second, and more importantly, during the approval of the $41 million, not a word was mentioned (going by the media coverage) about the critical sections in the first half of the capital budget document. These sections did not deal with departmental requests; instead, they focused on various metrics related to the city’s indebtedness and contained warnings from the city’s financial advisors that our capital spending needed to be curbed or we would lose our AAA bond rating.

(Norwalk’s long-term debt problems lessened considerably months later after the state passed a special law that guaranteed Norwalk and Stamford 60% reimbursement for school construction projects. The previous reimbursement rate for major school renovation projects was around 32%, and 22% for new schools.)

Back to the present: Last March, the Council again lost sight of the forest as it discussed the 2024-25 operating budget. Most of the debate concerned a motion, which was defeated, to increase the proposed $440.6 million budget by $300,000. The aim was to fund requests (that had been denied) for the city’s IT department and for the city’s family navigator program (which helps families connect with various resources, including energy assistance).

Unfortunately for the public, Council members did not seriously address the overarching issue confronting residents: the recent property revaluation. This was the first budget to reflect the results of the revaluation, which shifted a considerable portion of the overall property tax burden away from commercial properties to residential properties. Which meant homeowners were facing a hefty increase in property taxes regardless of the overall size of the budget. Instead of focusing on ways to reduce the $440.6 million, and thereby reduce the tax levy, the Council debated a motion to increase it by $300,000.

It should be noted that Norwalk’s Charter provides the Council with the authority to set a limit on the size of the operating budget and nothing else. The Council does not have the authority to move money around, to increase or decrease various line items. That role is reserved for the Board of Estimate and Taxation (BET).

I have no problem with the Council formally urging the BET to find money for IT and the navigator program. Which it did not do. But I do wonder why the Council established a limit on spending without first questioning the finance department’s revenue projections, which historically have been extremely conservative. Conservative projections are okay during normal budget seasons, but revaluation years are anything but normal. At the very least, the Council could have recommended that the BET revisit projected revenues.

Moreover, it appears the Council did not consider the possibility of phasing in the revaluation, spreading the fiscal pain over a longer period. At the end of the last millennium, before state law was changed to require municipalities to implement revaluations every five years, it was the Council that decided to phase in the long-overdue revaluation over four years. The current Council could have made a formal recommendation to the BET to consider a phase-in.

Not surprisingly, the BET ignored the Council. It did not discuss more funds for IT and cybersecurity, or the navigator problem. It ignored the Council’s spending cap of $440.6 million (which by Charter the BET could not exceed). Instead, it adjusted revenue projections upward and reduced spending to $435 million. It also decided to phase in the revaluation over four years.

As Mayor Rilling said, this was a challenging budget year. Looks like the BET was up to the task. 

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