After Lengthy Discussion, Tough Decisions Still Lie Ahead for South Windsor Town Council

While no decisions were made during the South Windsor Town Council’s special budget work session on Wednesday evening, the 3-hour discussion brought into sharp focus the challenges facing the town for the 2013-14 fiscal year.

But the debate dealt with more than just dollars and cents, as questions were raised surrounding the town's future and what it will look like years from now based on the policy decisions made today.

In the end, there were few answers. The consensus of the council was to have Town Manager Matthew Galligan report back as to what a budget with a 4 percent tax increase would look like.

That directive rankled Galligan, who said that such a request would require him to make cuts in services totalling about $1.6 million. Putting that in perspective, Galligan said that trash removal in town costs about $1.9 million per year.

Currently, the proposed budget for the 2013-14 fiscal year is $103.3 million, a tax increase of about 6 percent not considering revaluation. Last month, in a break from tradition, council members approved a $68.1 million school budget independent of the municipal budget.

Galligan has proposed a $35.1 million town budget that includes $29.67 for general government spending. The spending increase on the town side would be $1.5 million.

The recommended tax rate to support Galligan's budget would be 35.05 mills, which represents an increase of 5.62 mills over the current mill rate, according to Galligan. This number takes into account revaluation.

On May 6, several Republican town councilors proposed adding an additional $812,000 to the town government budget to fund a new police position, athletic fields, parking lot improvements, an additional contribution to the employee pension account. It also makes adjustments to revenue projections, cutting in half the amount used from the fund balance to mitigate a tax increase from $800,000 to $400,000.

If the proposal is absorbed in the proposed government budget for 2013-14, it could require an increase in the mill rate to 35.33, or .28 mills over Galligan’s original proposal.

Councilor Kevin McCann called the proposals fiscally responsible, stating that the improvements would make the town more attractive and raise property values, while reducing the amount taken from fund balance and increase in pension contributions put the town on firmer financial footing.

McCann noted that several expenditures in this year’s budget - including $900,000 to pay for the sewer treatment plant and $350,000 in rising health care costs - were unavoidable.

“I heard someone say, ‘Reduce the town manager’s budget by $1 million,’” McCann said. “Unless you cut out all capital projects and fire 10 employees, I don’t know where you get that savings.”

Later in the evening, Councilor Cindy Beaulieu said that she would not support a budget that uses the fund balance to mitigate a tax increase. Beaulieu said that reducing the fund balance would eventually lead to a downgrading of the town’s credit rating, which would wind up costing the town more money down the road if and when it eventually goes out to bond the elementary schools renovation project.

But Democratic Town Councilor Keith Yagaloff said that the proposed budget contains a tax increase that is “unprecedented” in town.

Yagaloff said that he supports funding the schools, but that outside of basic services such as police and fire, he could not support increases that would see the mill rate increase 20 percent in one year.

Yagaloff requested that Galligan “sharpen his pencil” and make cuts to reflect what a 4 percent tax increase would look like.

That’s when Galligan reacted by saying that the schools budget has received millions of dollars of increases throughout the years, but that the town operations side has increased just $100,000 during that same period.

Galligan said that the council approving the schools budget in April without considering the town operating budget too “[was] a slap in the face to the town manager.”

Galligan said that Yagaloff’s proposed 4 percent tax increase - given that the school budget has already passed - would not contain enough to cover the $900,000 sewer payment and that services would be affected.

Town Councilor Cary Prague said, without endorsing the additional $800,000 in proposed spending, that this year's proposed tax increase was in part due to having such low tax increases over the last six years.

Prague said that the tax increases have been zero, 1.2 percent, 1.8 percent, 2.2 percent, 2.4 percent and 2.27 percent over that period of time.

"Look at any other [comparable] town [such as Farmington and Simsbury]," Prague said. "They all had tax increases in the 6s and 7s [at one point]. ...

"We executed magic. ... The magic is all gone, folks."

How any and all of the proposals would impact South Windsor taxpayers was part of the lengthy discussion. This year’s revaluation has muddied waters.

Some residents could see a tax increase as high as 10 to 12 percent, while others could see significantly less than that, depending on how much their real property values decreased since the last revaluation (if they decreased at all).

Several models - one by McCann and another by Galligan - were presented that showed how the mill rate increase would affect a homeowner with a home of a certain fair market value.

The best way, however, to determine how a potential increase to the mill rate would affect a resident’s taxes is to go to the assessor’s office at Town Hall and calculate it there.

The next council meeting will be Monday, May 13 at 7 p.m.