Despite Democratic protests BET guidelines are approved

The Board of Estimate and Taxation (BET) 2013-14 budget guidelines were not a surprise, but what happens now is still a bit up in the air.

The board, as expected, voted straight along party lines at its meeting Monday night. The six Republicans on the BET voted in favor of guidelines that call for a 2.5% increase in the town’s mill rate, the lowest increase in recent memory. The Democrats, however, voted in favor of an alternate resolution more in the tradition of the 2% to 4% increase the town has historically had while also offering town departments the chance to present alternate budgets to illustrate the impact of lower budgets on services.

The deadlock was then broken by BET Chairman Michael Mason, who, under town charter, was allowed to cast a second vote, approving the Republican-supported guideline draft by an unusual 7-6 margin.

The guidelines, which in the past were not as specific as this year’s document, are non-binding recommendations from the BET for town departments preparing their budgets. But already the Board of Education is focusing on a budget that exceeds the recommendation, and when First Selectman Peter Tesei offers his town budget in February, he, too, could potentially go over the guidelines. All town department budgets have to first go through the BET’s Budget Committee and then the full board before going to the Representative Town Meeting for final approval, so there is oversight and the potential to cut, but it’s unclear what impact the guidelines will have right now on the ongoing process.

Budget guidelines have typically been unanimous votes on the part of the BET, but this year there was an even split, with Republicans on one side and Democrats on the other. Democrats said they believed the mill rate was far too small to be able to provide level services and that, through the guidelines, the Budget Committee was in effect saying what should and shouldn’t be done in next year’s budget instead of providing the looser framework for a budget it had provided in the past.

But BET Republicans said they were merely responding to a continued slow economy and what they feel is the desire of town taxpayers to have lower increases. Joseph Pellegrino, chairman of the Budget Committee, said there was support for the guidelines from the RTM’s Budget Overview Committee and that his goal was to “provide the highest level of services that the majority of our citizens want in the most efficient manner possible.”

“A 2.5% increase is justifiable and reasonable,” Mr. Pellegrino said, citing the slow rate of growth in the town’s grand list and the higher rate of town expense obligations. “When other factors are taken into consideration, such as the economic cycle, I feel even more strongly that this is an appropriate target to shoot for.”

He added, “Building budgets based solely upon needs, in my opinion, is not going to work. A balance must be struck, and an acceptance of the economic conditions our citizens have been subject to for the last five years must be taken into consideration.”

This was echoed by other members of the BET’s Republican caucus.

BET member Gregory Bedrosian, who works in finance, said Greenwich is unique, because “for better or worse” it is tied to Wall Street and capital markets. He said the expectation is that there will be job losses coming on Wall Street in the near future that will hit this community.

“The great recession is still upon us, in my view,” Mr. Bedrosian said, adding that Connecticut’s unemployment rate has grown this year. “Prudence should be brought to how we spend the town’s money.”

BET member Marc Johnson said that as a real estate developer in town he has seen property values down 20% since 2007, something that’s hit particularly hard in backcountry Greenwich, where he said property values are down 25% to 30%. When revaluation happens again in a few years, Mr. Johnson said, this would end up pushing more tax burden to areas like Riverside and Old Greenwich. He said this was a good time to “force discussions on some hard issues” and look for increased efficiencies in town government.

“I hear from friends and acquaintances asking me, if their property values are going down, why are their taxes going up?” Mr. Johnson said. “I try to explain to them about offering level services on the BET and they say, ‘Well, ok, but I still want you to do something about my taxes going up and up.”

The alternate draft was put together by the Democratic caucus led by Jeffrey Ramer and William Finger, both members of the Budget Committee. Mr. Finger also cited the slow economic recovery, but did it to show the increased demand in town for social services from the town’s elderly and those living near or below the poverty line. BET member Mary Lee Kiernan also cited this in her remarks, saying those making less than $50,000 in town would be hit the hardest because of their need for town services.

Mr. Ramer worried that holding the town to such a small mill rate would ultimately force layoffs from the municipal workforce, which would lead to a reduction in programs and services offered by the town. He said the guidelines that were ultimately approved prioritized a lower mill rate over town services instead of keeping to the balance that had been a part of past budgets.

“The core tenet which we have used as the sentinel by which we guide ourselves have for at least two decades been the maintenance of predictable, high-quality services balanced against low, predictable taxes,” Mr. Ramer said. “The moment you lose one side of the equation you have lost your compass and you are now adrift.”

BET member Sean Goldrick said the Democrats’ draft wasn’t just focused on mill rates, but moving toward long-term financing for town expenses, which he said would reduce pressure on current taxpayers by spreading the cost of capital projects over longer periods of time. There was also language in the draft to adjust the $8 million being put into the town’s general fund reserve, where the money would remain idle, to avoid having to cut areas like school maintenance.

“We should not be taking funds from the taxpayers and just sticking it in idle cash,” Mr. Goldrick said.

This draft included a request for Mr. Tesei and town departments to submit three different budgets, one of level services with a 3% mill rate increase to cover contractually mandated salary increases, one with a 2.5% increase, and one with a 3.5% increase to allow for “critical new initiatives.” This was designed to show what services are impacted at each level. The draft also called for a review of the town’s policy of limiting bond financing to five-year maturity, a review of the debt policy by the spring of 2013, a “rigorous analysis” of long-term infrastructure improvements, and a review to find efficiencies in town government to reduce costs.

“This will yield detailed and useful information needed to assess the impacts of various funding levels and mill rate increases on town operations, municipal services and capital needs,” Mr. Finger said, adding later that this draft provided “a more balanced approach and a better roadmap” toward a budget than the guidelines that were ultimately approved.

“Budget guidelines should be just that, guidelines,” Mr. Finger said. “They are not meant to be inflexible directives.”

 

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