EAST HADDAM — The Board of Finance will present a 2020-21 budget proposal with no anticipated change to taxpayers’ mill rate at a public hearing broadcast on the town’s YouTube page on Tuesday, May 5. Expenditures in the budget proposal total $34.18 million, which would be 1.8 percent or about $614,000 more than the current budget for fiscal year 2019-20.
Residents and taxpayers will be able to email questions ahead of the meeting to firstname.lastname@example.org and then have their questions addressed at the meeting, according to Board of Finance Chair William DiCristofaro.
The zero percent increase in taxes is possible because the increase in the town’s spending would be about equal to the growth of its tax base. DiCristofaro said in a Tuesday phone interview. DiCristofaro said that the Board of Finance, Board of Selectmen, and Board of Education collaborated to reduce their earlier budget proposals as the possible economic toll of the coronavirus became more clear.
“We were concerned about individuals and businesses suffering financial hardship and maybe from impacts down the road from [loss of] state revenues and even tax revenues,” DiCristofaro said. “We were concerned about all of that, and that drove us to keep this budget responsible in light of the circumstances.”
The town’s mill rate for fiscal year 2019-20 is 30.44, meaning property owners in town pay $30.44 for every $1,000 of taxable property value that they own in East Haddam. The finance board’s budget would allow the town to keep the same mill rate in the next fiscal year.
East Haddam’s most recent grand list — the total net assessed value of all taxable property in town — showed a 1.78 percent increase from October 2018 to October 2019. This means the town can expect more tax revenue even with the same mill rate.
Transportation, added firefighter, insurance drive spending
The finance board’s 2020-21 education budget proposal of $20.79 million would be 1.5 percent, or $305,690, more than that of 2019-20. Education would account for 60.81 percent of the total 2020-21 budget proposal.
Salaries and benefits together account for about $137,000 of this increase. Another $115,600 goes to increased transportation costs, mostly for special education.
The town government budget for 2020-21 would be $11.69 million, which is an increase of $372,014 or 3.3 percent. Town government — which covers the First Selectman’s office, town boards, public works, public safety, and debt service — accounts for $34.19 percent of the budget.
The biggest single increase in the budget summary is for fringe benefits, which would be $1.24 million, an increase of about $129,700 or 11.6 percent over last year. Town finance director Cynthia Varricchio said that more town employees are signing on to receive insurance through the town than previously.
The budget for services shared between the town and school also increased by about $95,700, which Varricchio said came from added technology services and plans to hire an outside company for payroll.
Finance board chair says financial reserves are strong to prepare for uncertainty
East Haddam’s Board of Selectmen recently voted to enter into a tax deferment program that will give taxpayers claiming hardship from the coronavirus the chance to apply for a 90-day grace period without interest on local taxes usually due between March and July. This is in keeping with one of Gov. Ned Lamont’s executive orders requiring towns to enter into at least one of two leniency programs for taxpayers.
Varricchio said that the impact this would have on the town’s cash on hand is still “to be determined.” She said it could depend on some repairs the town is making in connection with a September 2018 storm, which will require the town to pay the costs up front but then make East Haddam eligible for a 75 percent reimbursement from FEMA.
“We will be doing some serious construction projects and then awaiting reimbursement,” Varricchio said. “That could have some problems with cash flow, but we’re a [fiscally] healthy community. The treasurer and I will be monitoring that along with the Board of Selectmen and Board of Finance.”
DiCristofaro, chair of the finance board, added that the town’s unassigned fund balance — essentially its reserves — amounts to more than 13 percent of the 2020-21 budget proposal, giving the town the ability to meet its obligations if there’s an unexpected drop in revenue or increase in expenses.“So we have a cushion,” DiCristofaro said.