NORWALK, Conn. — You appear to be set for virtually no increase in your Norwalk property taxes this year, courtesy of the American Rescue Plan.
The Board of Estimate and Taxation voted unanimously Monday to approve a 2021-22 tentative operating budget that carries no increase in the mill rate, factoring in $12.9 million of American Rescue Plan funding. It offers no increase for the Board of Education – so that’s a 0% increase instead of the 2.6% increase that drew Board member protests – but Norwalk Chief Financial Officer Henry Dachowitz and Mayor Harry Rilling said they expect American Rescue Plan dollars to give Norwalk Public Schools the funding it needs.
The BoE will use the federal money from the $1.9 trillion American Rescue Plan to “somehow compensate for the increase that they are anticipating,” Dachowitz said.
School officials were not present.
It appears that NPS will be getting $27.5 million from the American Rescue Plan, divided over two years, Dachowitz said. The City had planned to allocate a $4 million increase to the schools and now is planning to keep the funding flat.
The federal money comes with restrictions.
“The rules get a little tricky,” Dachowitz said. “(Norwalk Public Schools Chief Financial Officer) Tom Hamilton and I have had a conversation. Cash is cash. So the funds can be used for things that are permissible. But if they are used for things in their budget that are permissible, that frees up those funds to be used for the increase.”
The American Rescue Plan money is also cancelling the plan for a $8 million drawdown from the general fund balance, or Rainy Day Fund.
The average mill rate this year is 23.875. The tentative budget for next year results in an average mill rate of 23.904.
“We also felt that, again, the (ARP) funds should be used for the greatest good,” Rilling said. “And probably the easiest way to accommodate that greatest good across businesses, residents, is to come in at a zero-tax increase, rather than seeing people have to pay more. Some people have lost their employment. Landlords are not able to collect rent in many cases, businesses have seen a decline in their revenue. There’s a lot of different things that are impacting not only the city of Norwalk, but Fairfield County, Connecticut, and indeed the entire nation.”
‘According to our reading and understanding of the legislation, we are allowed to come in at a flat tax. We are not allowed to use those funds to reduce taxes from what they were last year,” Dachowitz said.
BET member Sheri Brown asks about the parents’ fears that NPS would have to cut services without additional funding.
Spending decisions are made by the Board of Education, Dachowitz said.
“We set a budget. They have other funds, whether it’s grants, whether it’s from the American rescue plan, and they decide how to allocate their dollars,” Dachowitz said. “So if cut programs or lay off teachers, that’s their choice. But as Mayor Rilling has pointed out, the American Rescue Plan, which has restrictions, specifically said that these funds are designed to avoid layoffs. So we don’t have any say in how they allocate their dollars. But we would hope that they use those funds in a way that benefits all the school children and addresses some of those concerns of the parents.”
He mentioned the fear articulated by Hamilton lately, a “cliff” in funding.
“I would say (Hamilton) understands what the goal was that we’re trying to keep the taxes flat for the citizens. …. His concern is that in two years time, the amount of increase will be a multiple of what it might be this year,” Dachowitz said.
The efficiency audit will hopefully result in “recommendations to both the Board of Education and the City on ways to spend funds more efficiently, to save money, to get greater efficiencies,” Dachowitz said. “So we’re hoping that that might help offset some of the gaps that we end up with.”
Keeping the Board of Education at the $208 million in funding it received for 2020-21 eliminates any issue with the minimum budget requirement, the State law that doesn’t allow a municipality to cut education spending, he said.
“I also think the general public would expect not only the City, but the Board of Education, to use the funds in a manner that is going to reduce costs yet still fund all the services that we need,” Rilling said. “I think not to do that would be sending the wrong message to the public. It’s an opportunity for us to keep the budget flat. And we’re trying to take that road.”
Board of Estimate and Taxation Chairman Ed Camacho also expressed hope that the efficiency study will help lesson the effects of the cliff.
“We’ve talked about taking an incremental approach to that,” Rilling said. “And I think that’s how we can all work together to make sure that we don’t all of a sudden fall off that huge cliff, that we do have a method in place that we can gradually increase to get them to where they need to be in year three.”