Lauretti's budget: Tax hike, schools ‘flat-funded’
For the first time in a decade, Shelton residents can expect a tax increase, according to the mayor’s budget 2019-20 fiscal year proposal released Wednesday.
Mayor Mark Lauretti, in what was his 28th consecutive budget address, presented members of the Board of Aldermen and Board of Appropriations & Taxation with a $127,569,660 budget, which, if approved as proposed, would result in a mill rate of 22.62, a 2.12% increase from last year’s 22.15.
“This coming year’s budget will require belt tightening, and all departments will share in it,” said Lauretti.
The most major hit comes with the Board of Education, which will be “flat funded” under the mayor’s budget plan, receiving $72,700,000 instead of the $74,873,729, a 2.99% increase from the 2018-19 fiscal year, requested by board members in late January. Even with a 2.99% budget increase, school administrators stated one administrator and 14 teachers would still need to be eliminated.
The mayor's decision comes as little surprise to administrators, since Lauretti stated in January the Board of Education would receive nothing more than what it received last year in his 2019-20 budget proposal.
“The budget we put together was the lowest responsible ask we thought we could have,” Board of Education Chair Mark Holden told the Shelton Herald Wednesday moments after learning of the mayor’s budget proposal. “We will do the very best for our students with whatever money is allocated to us.
Lauretti cited potential financial hits coming from the as-of-yet approved state budget as well as Board of Education spending over the past two years — associated with the special education excess cost grant — which the mayor claims led to the depletion of the city’s fund balance.
"We are challenged with a multi-year Board of Education special education excess cost grant, which was budgeted as a revenue to city then spent by Board of Education, in addition to their approved and appropriated budget, the past two consecutive years,” said Lauretti, adding that this additional spending the past two years has resulted in the city’s fund balance being depleted by $3.1 million.
“The impact of this not allow the city to maintain the current mill rate, as we have effectively used this fund balance the past 10 years,” said Lauretti. “I can assure you corrections are underway to restoring levels to the fund balance.”
Holden said he is concerned that the mayor does not understand how the special education excess cost grant works.
“Special education is not intended to be a profit center for the city,” said Holden. “As special education costs go up, that is what drives the excess cost grant. That money would not exist if our costs did not go up. The grant is not even enough to cover the increased costs, it is enough to help.”
Holden said the Board of Education receives only 70% of anything more than four times the average special education student cost.
“If costs don’t go up, that money does not exist,” said Holden.
The Board of A&T, no later than May 1, will review the mayor's budget and hold at least one departmental hearing in joint session with the Board of Aldermen. Board of A&T then submits the budget to the Board of Aldermen.
By May 15, the Board of Aldermen will have to review the budget and hold at least one public hearing. The Board of Aldermen must adopt a budget and tax rate in mills and file it with the finance director by May 31.
"As always, I remind everyone that the budget process culminates with the adoption of the budget by the Board of Aldermen at the end of May, and there will be changes along the way as new information is obtained,” said Lauretti. “And if the Board of Aldermen is able to find in excess of a couple million dollars, they could maintain the current mill rate.”
Lauretti said that the residents’ ability to pay is always his top priority when setting budgets.
“We can all agree that we in Shelton have enjoyed a good deal of economic prosperity with 28 straight years of a growing tax base,” said Lauretti. “This past year was no different.”
The city of Shelton's 2018 grand list increased 1.36% over the past year. The net grand list sits at $4,736,369,384 in total assessments (70% of market value), an increase of $63,549,269 from 2017's total of $4,672,820,115, according to a preliminary grand list report completed by Assessor William H. Gaffney III and submitted to the mayor's office on Jan. 31.
“Yet we are always presented with challenges,” said Lauretti, “and this year is no different.”
The impending state budget presents numerous challenges, according to Lauretti, with talk of shifting 25% of teacher pension costs to cities and towns, instituting tolls on state highways, the loss of motor vehicle taxes to cities and towns, removing the elderly tax credits, and raising the sales tax as well as other “less subtle unfunded state mandates.
Shelton annual economic growth and lack of tax increases over the past 10 years has also been a detriment, said Lauretti, causing the city to lose out on various state program funding.