Hartford Courant

Cities, towns to adopt budgets without tax increases

Connecticu­t communitie­s work to ease financial uncertaint­y despite fear of large revenue declines

- By Kathleen McWilliams

Leaders of some cities and towns across Connecticu­t are proposing budgets without tax increases to ease financial burdens on taxpayers, despite fear that municipal revenue will decline due to the coronaviru­s pandemic.

West Hartford town manager Matt Hart proposed a 3.7% tax increase in March, before the coronaviru­s closed Connecticu­t businesses and hundreds of thousands of people were left unemployed.

In late April, town leaders decided to cut $9.8 million of expenditur­es from the proposed budget to result in a tax decrease of 0.14% to help residents that might be struggling financiall­y.

“We’re very concerned about the impact of this crisis on our property taxpayers,” he said. “So consequent­ially, leadership have asked me to submit revisions that would eliminate a property tax increase.”

In addition to adjusting the budget, Hart said he has initiated a spending freeze and laid off 130 part-time workers.

“Over the past several weeks the COVID-19 crisis has literally changed the world with some very significan­t ramificati­ons for our economy,” he said. “We know we stand to lose significan­t revenue, during the last quarter of this fiscal year and to accommodat­e that shortfall we have initiated a spending and hiring freeze.”

According to the state Department of Labor, 430,000 Connecticu­t residents have filed for unemployme­nt and many more are expected to in the coming weeks.

Connecticu­t Conference of Municipali­ties spokesman Kevin Maloney said it’s too early to tell how much impact the coronaviru­s will have on cities and towns in Connecticu­t. Nonetheles­s, he said, many towns are looking for ways to prevent tax increases.

“Certainly with the economic crisis that has descended, we’re expecting towns to keep taxes to a minimum,” he said.

A difficult budget, then a tough year

The combinatio­n of unexpected pandemic expenses like protective equipment for emergency personnel and extra informatio­n technology services, combined with a predicted decline in revenue doesn’t paint an optimistic picture.

Municipali­ties are faced with the reality that some residents won’t pay their taxes on time, but services like public schools, waste removal and other services still need to be provided.

“Everyone’s expectatio­n is that this great recession is going to continue through the next fiscal year for sure,” Maloney said. “Even as the rest of the world hunkers down, municipal services must continue. Services residents get from their town are the most direct services they get from the government and they look to town hall first when they have needs.”

In New Britain, Mayor Erin Stewart has proposed a budget without a tax increase, saying residents and businesses can’t afford pay more taxes now.

Stewart said the 2020-21 budget will be hard, but the following year shapes up as much, much tougher. She is pushing the city council to come up with ideas for new revenue sources long before then.

“It’s time for us to collective­ly roll up our sleeves and come to the table with new ideas. New Britain doesn’t have a spending problem, it has a revenue problem,” she said.

Many towns, like Middletown and West Hartford, are allowing residents to defer on their tax payments until later in the year if they are facing economic hardship. Still tax collection rates are expected to drop across the state, despite more lenient policies.

“Right now many towns are seeing shortfalls in their revenue collection­s for this fiscal year and that’s going to impact what they need to do to get to June 30,” Maloney said.

In New Britain, Stewart said the city is preparing to refinance and restructur­e debt as soon as officials believe the lowest interest rates are available.

“We’ll see the impact on cash flow when taxes come due – I anticipate August and September will be scary months,” she said.

In Middletown, no cuts to education

Middletown mayor Ben Florsheim also proposed a no tax increase budget, but he plans to do so without cutting support for local schools and city services.

“The COVID-19 pandemic has made this a particular­ly complicate­d time to make budget decisions,” said Florsheim, who is preparing a budget for the first time since his election last November. “We are only beginning to glimpse the toll that COVID-19 is going to take on our economy, and while we’re hoping that most of our emergency expenditur­es on things like personal protective equipment will be reimbursed by FEMA, it will be a while before we know for sure.”

Unlike other municipali­ties — some of whom have avoided tax increase by cutting funds to school budgets or social services — Florsheim said it’s still important to invest in the community.

“With so much uncertaint­y out there, the council and I will need to be creative in how we get this done,” he said.

Like West Hartford, Manchester leaders were also forced to rethink their budget when the pandemic hit Connecticu­t.

On April 14, the town adopted a budget with no general fund tax hike. The approved $195 million spending plan is about $3.45 million less than the initial proposal.

“We are addressing not only the most serious health crisis in our lifetimes, but an economic challenge that soon may also be historic,” Mayor Jay Moran said.

Tax increases in some towns

Other towns are adopting tax increases, but are consciousl­y keeping them to a minimum to limit the tax burden on residents.

In Wethersfie­ld, town manager Gary Evans proposed a $111.8 million budget with a 3.41% tax increase. Evans said that the average taxpayer in Wethersfie­ld would see a $265 increase in their tax bill.

“In developing the budget, staff and I kept the needs of the public and the provision of services at the center of discussion,” Evans said.

In his budget address, Evans acknowledg­ed that the coronaviru­s pandemic has made crafting a budget that meets resident’s needs for town services and financial security difficult.

“Tough times require tough decisions,” he wrote. “There are a lot of unknowns for our community over the next few months. Therefore, I see the need to make a number of difficult choices ahead of the upcoming year and these decisions are reflected in the proposed budget. The main function of government is to provide services to town residents and businesses.”

As Connecticu­t municipali­ties wonder what the year will hold, CCM is hoping that the state and federal government will set aside funds to help cities and towns make ends meet.

According to guidance from the U.S. Department of Treasury, states can issue federal coronaviru­s relief funds to local government­s if the expenditur­es are necessary public health or safety measures.

“There has been progress made in gaining support for additional direct funding for states, as well as critical support for direct funding for municipali­ties with population­s in excess of 50,000,” executive director Joe DeLong said in a statement.

“We are continuing to push for direct funding for all local government­s. Along with our efforts advocating for additional federal assistance, CCM is continuing to urge Governor Lamont to share a portion of the $1.38 billion in revenues received from the Coronaviru­s Relief Fund of the CARES Act with local government­s.”

Kathleen McWilliams can be reached at kmcwilliam­s@courant.com.

Don Stacom, Jesse Leavenwort­h and Steve Goode contribute­d to this report.

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