Tolland Council Members Offer Budget Comments Before Referendum

TOLLAND, CT — Tolland Town Council Chairman Jacob Marie and council vice chairman Chris Moran Friday wrote an open letter to the community about the upcoming budget vote.

The second referendum is scheduled for 6 a.m. to 8 p.m. on May 20 in the Library Program Room.

Voters will be asked to consider the following:

“Shall the Town of Tolland’s proposed 2025-2026 budget of $64,939,258,
reflecting a spending increase of $1,273,318, or 2% which requires an
estimated tax rate of 27.23 mills for a decrease of 10.54 mills or 27.91%
be adopted?”

Yes/No

Here is the full transcript of the letter:

"On May 20th, the Tolland Town Budget will go to referendum a second time. We would like to
provide some important context to voters as they make their decisions at the ballot box.
First, it’s critical to understand that the proposed spending increase is a modest 2%. This
represents a $642,229 reduction from the previous 3.01% budget proposal. The Council heard
voters at the last referendum and made significant changes to expenditures to reflect their
concerns that the 3.01% spending increase was too high. Please see the table at the end of this
letter for a more detailed breakdown of the tax impact between Referendum One and
Referendum Two.

"Additionally, what is driving the tax increase this year isn’t really the spending increase, it’s the
property assessment revaluation, which we are required to complete every five years per state
law. This year, home values skyrocketed whereas commercial real estate essentially stayed flat.
The result was a substantial shift in tax burden from commercial property to residential. This
means that even at a zero percent budget increase, taxes would still go up. The amount needed
to cut to achieve a zero percent tax increase is well over $2 million, which is well below the
current adopted budget. In other words, the Town and School district would need to make
substantial reductions to staff and services to get close to a zero percent tax increase. This
would have serious negative long-term consequences for the Town, such as the closure of
entire departments.

"When the Council first learned of the revaluation, we, like you, were shocked and asked lots of
questions to see if there was anything we could to mitigate the impact for taxpayers.
Unfortunately, there is very little flexibility. It’s not legal in the State of Connecticut to tax
commercial property at a higher mill rate than residential. Additionally, although technically
feasible to phase in the revaluation over several years, it’s proven incredibly challenging to do
in practice given the limited Town staff we have to implement such a phase in, and has the
unintended consequence of messing with funding formulas for state grants, which would
reduce revenue even further.

"That being said, this Council has worked hard to do whatever it can to offset the mill rate for
taxpayers. We are assuming a higher tax collection rate based on historical averages, and using
$300,000 from our tax stabilization fund (the maximum amount allowed). Additionally, we are
using $700,000 of unassigned fund balance for mill rate reduction this year. This is an
unprecedented amount (in the past at most $300,000 was used) and we must be careful about
using additional funds beyond this. Although the town’s investments did well last year, that
money is unfortunately not as available as one may think.

"Between this year and next, the town must pay a $344,656 workers compensation settlement
and find a way to cover approximately $1 million in lost revenue when the town loses its
eligibility for the state motor vehicle tax cap grant per CGS Sec 4-66l. This will all put a strain on
the unassigned fund balance, which must maintain a value equal to between 10% and 15% of
the town budget. Thus, although we can lean on the fund from time to time—especially in an
unprecedented year such as this one—it isn’t an unlimited pool of money, and if we have more
failed referendums, we will need to make more and more spending cuts.

"Finally, many have asked about capital budget items (buildings, vehicles, infrastructure
projects) as an area to reduce spending. The Council has taken a look at them as well, and we
have reduced all that we can that would impact the mill rate. It’s important to recognize that
most capital expenses are paid for via debt, in cash from a dedicated fund, or through grants, so
in many cases cutting a capital project will have little to no impact on your taxes. Indeed, many
of the projects currently taking place in Town from the pickleball courts to the parks garage are
being completed using either ARPA money or grant funding, not taxpayer money.

"To conclude, the budget before you on May 20th is not extravagant. 2% is below the inflation
rate and it already results in reductions to town functions and staff positions. Furthermore, the
budget utilizes multiple non-recurring funds to mitigate the tax impact. Throughout this
process, the Council has taken seriously the financial concerns of residents and has not put
forth a budget without being ever mindful of that fact. It is important to emphasize, however,
that even with the current budget going to referendum next week, both the Town and the
Schools will have to make significant cuts. Please take this into consideration when you vote,
and reach out to the Council with any and all questions."