Updated, 1:22 p.m. with PowerPoint presentation
NORWALK, Conn. – A 3.9 percent average tax increase for Norwalk property home owners was forecast Monday night by Norwalk’s finance director.
Thomas Hamilton recommended a $311 million operating budget to the Board of Estimate and Taxation, a 4.88 percent overall expenditure increase. The increase for the median single family in the fourth taxing district would be $6,338, an increase of $250, he said.
To avoid a tax hike, the city would have to find $9 million in cuts, Director of Management and Budget Robert Barron said. Mayor Richard Moccia said that would mean holding the Board of Education to its funding from last year while “emasculating” other departments.
“Nobody wants to raise taxes,” Moccia said. “… Essentially, in order to get it to almost no increase, we would virtually have to paralyze this city.”
Moccia said there are many factors outside the city’s control, that the economic conditions the country faces took a long time to develop. Barron replied, “The almost 4 percent increase that Tom is recommending here totals $14.5 million in the aggregate, of which the Board of Education is getting 8.3. That leaves 6.2 for the city and pensions. The idea of cutting $9 million from only a $14.5 million increase would be incredibly difficult.”
Hamilton said there were several “yellow flags” in his recommendation, including that the state legislative session ends after Norwalk’s budget decision-making cycle is over. He assumed that state aid would remain flat with his recommendation, but that is far from certain.
The budget proposed by Gov. Dannel Malloy is “only his recommendation,” Barron said, reminding everyone present that two years ago Malloy was counting on aircraft and boat taxes that did not come to pass.
Other assumptions in Hamilton’s recommendation include a $12.8 billion grand list (an increase of .2 percent), a tax collection rate of 98.5 percent (up from 98.2 percent) and a $1.7 million use of the fund balance. He expects back tax collections to increase $862,000 due to a planned tax sale and departmental income to increase by $572,135.
Interest income is expected to remain flat at $712,000. It was $7 million during good times, Hamilton said.
The budget puts “downward pressure” on Norwalk’s bond rating, Hamilton said, with a 7.9 percent fund balance. He did not think it would result in Norwalk being downgraded from its Aaa bond rating, but he was not sure.
The budget funds almost the entire Board of Education request, including the restoration of part-time library aides. There are other new positions not included in the recommendation (Hamilton did not specify what those were), which also calls for $370,000 reduction in unemployment and non-personnel expenses.
It also funds three new police officers that Moccia said could be used for school security.
It eliminates 50 percent of the accrued deficit in the insurance fund and funds both the operation of the new fire house — expected to be complete this summer — and the operation of a “new” Norwalk Museum at the Lockwood House. It includes $1 million of financial benefit due to the city’s outsourcing of its garbage collection to City Carting.
Board Chairman Fred Wilms agreed with Moccia that the tax hike is necessary.
“I don’t think the public wants a meat ax applied to the budget, going in and lopping off whole departments or whole groups,” he said. “There needs to be a rationale behind it. For example, last year, when the garbage was outsourced, there was a rationale behind it. We changed the business model and reduced expenses.”
The next step in the budget process is for the Common Council to set the cap Feb. 26. The BET will hold budget workshops between Feb. 25 and March 13. On March 20, the BET will hold a public hearing on the proposed budget. On April 1 it will set the tentative budget.
Budget documents will be posted on the city’s website Wednesday. The PowerPoint presentation is attached below.