Law Director: Further Budget Referendums Invalid

As a group opposed to the second 2013 municipal budget and tax rate passed by the New London City Council gears up to challenge the measure at referendum for a second time, the city’s law director has declared that such action is illegal under the City Charter.

In a Wednesday memo from Jeffrey Londregan to Mayor Daryl Finizio, the law director says a referendum is not possible after the city has expended 25 percent of the prior year’s budget. Londregan said the restriction formerly put a halt to the referendum process in 2003 and 2007.

“The city simply cannot shut down and suspend all services to allow a potential never ending process of petitions to send a budget to referendum,” Londregan said.

2003 precedent

The 2003 decision was made by Law Director Thomas Londregan in relation to a fourth petition challenging the 2004 fiscal year budget. That budget was twice reduced by the council and rejected once at referendum in a 1,631 to 1,460 vote.

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Thomas said that under the former city manager form of government, the establishment of the budget fell to the City Council. He said the charter allowed voters to repeal a budget but did not stipulate what action could be taken at that point. His opinion was that when read as a whole, the charter dictates that until an appropriation becomes effective the council could only spend up to 25 percent of the prior year’s budget.

“If voters could petition over and over again and if the council could send each petition to the voters at the polls, with the 25 percent restriction on spending, the government of the city would come to a halt,” Thomas wrote at the time. “The drafters of the City Charter could not have anticipated such a bizarre result. There is no authority either in state statutes or in the City Charter that allows multiple petitions that could go to the voters at the polls.”  

A 2010 vote changed the city government from a city manager to an elected strong mayor form of government. The budget process remains at the council’s discretion, although the mayor may use a veto or line item veto which can only by rescinded by a six-sevenths vote of the council.

Londregan said the charter was amended to reflect the change in government, but that the changes did not affect the reasoning of the 2003 decision. He said he considered that the legal opinion regarding referendums is still valid and that any further petitions for a referendum “would need to be declared null and void as there would be not statutory or charter authority for such further votes and reconsideration.”

Clerk instructed to reject budget petition

The council voted 5-2 on Tuesday to pass a $41,264,459 municipal budget with a tax rate of 26.6, a 5.1 percent increase over the 2012 rate of 25.31. This was approved after a referendum vote previously approved by the council.

Finizio approved the appropriation ordinance and tax rate today and presented them to City Clerk Nathan Caron. He also presented Londregan’s memo with the instruction that Caron is not to “issue, accept, or certify any petitions related to the annual appropriation ordinance for the city of New London for fiscal year 2012-2013.”

Finizio said Finance Director Jeff Smith informed him that the city reached the 25 percent threshold in September. He said that due to the time needed to certify and approve a referendum with 30 days’ notice beyond the November election, the earliest a vote could take place would be in early December. He said this would interfere with the December preparation of tax bills for January. The tax bills have already been issued once under the 2012 budget since a 2013 budget was not in place. Finizio said a supplemental tax bill could take place in the spring, but that it would be costly to prepare and send these bills.

“We’re running into some real structural problems here in terms of just getting it done to get a city budget in place,” he said.

Finizio said the five percent tax increase was the maximum level he heard in discussions with people opposed to the original budget. He said that due to a depleted general fund, he is also concerned that further cuts may be necessary to stay within budget in the event of unanticipated revenue shortfalls or overspending.

“We’re skating on the thinnest of thin ice here,” he said.

Opposition

The two city councilors opposed to the revised budget said they did not agree with some reductions, such as $500,000 in anticipated savings from debt refinancing and $250,000 cut from the New London Police Department budget to leave six vacant positions unbudgeted. Some residents also criticized the budget, saying they were dissatisfied with the reduction and that they felt the council had not worked sufficiently beyond Smith’s recommendations.

Lindsey Blank, a member of the organization Lower Our Taxes, said the group decided at a meeting two weeks ago that it would mount another challenge to the budget. He said LOT has taken the referendum issue to court in past instances involving the rejection of petitions, but was unsure of the ruling.

“I would think they would go forward with the signatures, and at that point let the city come back and put it in writing,” he said.

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