New London to weigh fate of $90M budget
City Council faces petition calling for vote on spending plan
New London — Facing state and local deadlines for action, the City Council today will take up a more than two-month-old petition calling for reduction in the city’s budget or a referendum vote on the spending plan.
The petition was a response to passage of a combined $90.05 million budget for fiscal year 2018 that led to a more than 9 percent tax hike. City officials have blamed the increase mostly on a drop in state revenues and an uncertainty because of the lack of a state budget.
The council today has two options on the agenda — repeal the $48.3 million general government and $41.7 million education budget or approve language for a referendum in November.
City Councilor Martha Marx, chairwoman of the finance committee, said she has concluded that the only reasonable action will be to repeal the spending plans.
The referendum question would ask voters to either approve or disapprove of the spending plans but is likely to be a moot issue by then, according to an opinion from City Attorney Jeffrey Londregan.
Londregan told the council last month that a provision in the city charter stipulates that the city government cannot spend more than 25 percent of the previous year’s budget until a new budget becomes effective. Once the city spends more than 25 percent of the budget it cannot be challenged at referendum and the last budget passed by the council becomes effective.
The reason, Londregan has opined, is that the city cannot have a government shutdown. The 25 percent threshold is meant to sunset the ability to have any further petitions too far into the budget year.
Marx said finance director Don Grey has estimated that the city is on track to spend the 25 percent sometime in mid-October, before the referendum would take place. The council faces a Thursday deadline to get a budget referendum to the Secretary of the State’s Office.
Sending it to referendum, in that case, would be “disrespectful to the constituents that signed the petition,” Marx said.
Instead, Marx said she expects the council to consider repealing the budget ordinances and waiting until the state passes a budget. Once a state budget is passed, Marx said the council will be able to come back, reduce the budget and plug in new state numbers that are more favorable to
the city’s tax rate.
“All of this is driven by the state. The city, I think, has been as honest as we could putting together our budget but this 9 percent (tax rate increase) is scaring people. I’m trying to be optimistic that the state will help the most distressed city in the state.”
If the council does not pass a new ordinance before the 25 percent threshold is passed then the fiscal year 2017 budget becomes effective, something Marx said “would be a disaster for the city,” and probably make layoffs unavoidable.
Dan McSparran, who led a petition drive that saw more than 600 people sign on and ask for budget reductions or a citywide vote, thinks the legal opinion on the 25 percent threshold is flawed.
“On its face, from a logistical standpoint, how does that make any sense,” McSparran said. “If you hit the 25 percent threshold you can spend whatever you want. That’s ridiculous.”
McSparran said his reading of the charter is that the budget should be frozen if the city spends more than 25 percent of the budget without action on the petition. Under Londregan’s interpretation, McSparran said the council could simply ignore petitions and get their budget passed.
The charter also allows the council to send the petition question to voters earlier than the November election if at least five councilors vote in favor of that measure.