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Recommended budget calls for a Norwalk tax hike

Norwalk Board of Estimate and Taxation Feb. 12 2013 066
Norwalk Finance Director Thomas Hamilton explains his recommended operating budget to the Board of Estimate and Taxation Monday evening.

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.

Norwalk operating budget 2013_0003

Comments

19 responses to “Recommended budget calls for a Norwalk tax hike”

  1. LWitherspoon

    Nancy
    Thank you for the PowerPoint. Will you also include the link to the budget documents when they are posted?
    Hamilton’s statement about losing $6 million in interest income is interesting. Those who benefit financially from low interest rates don’t realize that those same rates blow a $6 million hole in the City’s budget, leading to either lower services or higher taxes.
    The unanswered question here is what specific items account for the spending increase that is giving us yet another tax increase? In terms of increased services, we are getting three new police officers and some library aides. Yet somehow spending is going up by $14.3 million dollars. I’d like to know why.

    1. Yes, I’ll put the link up. I’m also going to take another shot at making a PDF and see if I can get one with all the pages in it.

      There are costs that escalate every year without the city doing anything new. Pension and health insurance benefits are ballooning, but Mr. Hamilton hopes they will level off in a few years, as I recall.
      The city has closed its pension plan new hires effect July 1, 2012. Hamilton says there are $18-20 million of savings over 10 years with the new plan.

  2. Bryan Meek

    Mr. Hamilton’s supplemental information in the city’s annual report show some interesting 10 year trends.

    In the last 10 years, city spending and debt are up over 50%, while per capita income is up 25%.

    With UBS laying off 3000 people and defense contractors starting to announce their cuts, it looks like this trend will continue for some time.

    At least the city’s increase at 4.5% is half of what the state needs this year.

  3. OK, the complete PowerPoint presentation is now attached.
    I sent Mr. Hamilton an email a little while ago; the documents are not online yet but he hopes to have them there by the end of the workday.

  4. Tim T

    Maybe if the mayor was actually a taxpayer in Norwalk he would be more concerned about a tax increase.

  5. Tim T

    Bryan Meek
    states
    “In the last 10 years, city spending and debt are up over 50%”

    Let us not forget that Moccia was Mayor during most of these 10 years..Looks to me that he has failed miserably to control costs.

  6. Bryan Meek

    I wish there was an ignore user feature on this site like Yahoo.

    That way we wouldn’t have to be assaulted by Tim’s baseless partisan quips.

    By his logic, President Obama is to blame for everything the last 4 years.

    Even though contracts were approved from prior administrations, Tim has no problem correlating the results to the Mayor’s tenure.

    (This comment has been edited according to our recently posted comment guidelines — editor)

  7. Bryan Meek

    If you were to apply Mayor Knopps rate of growth from his tenure in local government to the current Mayor’s 7 year history, our budget would be north of $350 million now instead of around $310mm.

  8. Tim T

    Why Bryan you cant handle the truth about Moccia…All I did you emphasize what you pointed out. ““In the last 10 years, city spending and debt are up over 50%”..I would think being Moccia has been in office for all but 3 of these year your point about Mayor Knopps has no validity.
    As far as President Obama goes I think anyone with any sense would agree that he pulled us out of the near depression that the Republican Bush created.

  9. Tim T

    Bryan Meek
    Instead of attempting to read into what could have been
    “If you were to apply Mayor Knopps rate of growth from his tenure in local government to the current Mayor’s 7 year history, our budget would be north of $350 million now instead of around $310mm.”
    Maybe you should concentrate on what is as in $310mm

  10. Documents are now posted:
    http://norwalkct.org/index.aspx?nid=941

    The links are also in the story above.

  11. Bryan Meek

    @Tim

    Agreed, let’s concentrate on the $310MM and forget about the $350MM that it would have been had Moccia not reversed the trend of spending under Alex.

    That is what we have to deal with now.

    You know kind of like how Obama has grown government spending and debt 40% in 4 years while 10 million fewer people have jobs in the country. Focus on the here and now right?

    (This comment has been edited in accordance with our recently releases comment guidelines. Other comments by this poster have been deleted.)

  12. Tim T

    Amazing Bryan is once again violating the TOS..Did I call you any childish names at all NO I did Not..All I did was point out how your Mayor Moccia has failed and failed miserably by using the information that you posted ..I guess when you are presented with things that you don’t like to hear you respond like a 3 year old. Tell us Bryan are you afraid that the GREAT OZ will be made at you for that post.

  13. Tim T

    Oh Bryan
    I forgot to mention.
    Did you forget about what the economy was before Obama took office..You know banks closing daily, the largest investment firms going under, layoffs daily due to so so many companies going under. We could also mention how we were days away from a depression, the car companies going under, the housing crash, and 2 wars started on lies.
    ALL BEFORE OBAMA TOOK OFFICE AND NOW ALL FIXED THANKS TO OBAMA
    Shall I CONTINUE?

  14. Tim T

    Nancy
    You may want to look at the posts from Bryan Meek..They seen to violate the TOS time and again.

  15. Mr Norwalk Ct

    Bryan
    I would suggest if you would like to see the definition of a troll you look at your own posts.
    You may not agree with Tim and that’s fine however he makes some very valid points. On the other hand the only point you make is that you are very immature and childish I think it’s time to grow up

  16. Bryan Meek

    You have to love anonymous posters who can dish it out, but can’t take it. It will be interesting to see if they ever offer their own plans or factual analysis instead of crying a river.

  17. Tim T

    Oh I do have a plan..Maybe you didn’t understand it. VOTE MOCCIA OUT OF OFFICE..

  18. Original BARIN

    We need some buildings on those empty lots around town pronto.

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