STAMFORD – City representatives wanted $5 million more to be cut from Mayor Caroline Simmons’ budget so that the 2023-24 tax increase will not exceed 2 percent.
It’s important this year, representatives said, because the tax increase for some property owners could be triple that, or more, after factoring in a state-mandated revaluation that jacked up values.
Simmons didn’t want any more cuts to her $647 million budget because, she said in a letter to the board, it “would negatively impact city services for residents.”
The Board of Representatives’ Fiscal Committee met Wednesday night to deliberate the budget, a discussion that in many years goes into the morning of the following day, as members comb the spending plan looking for things to cut.
But, this year, the meeting was over within half an hour.
The board and the administration had reached a deal.
Representatives agreed they would not cut the budget for the city and schools if the mayor’s staff found $5 million in savings. The likely target was $20 million Simmons wanted to add to a reserve fund set aside to help pay for a 20-year, $1.5 billion plan to repair and reconstruct Stamford’s aging and long-neglected school buildings.
The Board of Finance created the reserve in 2022 by taxing Stamford property owners an extra 1 percent, raising the initial $20 million for school construction. But last year Simmons, who took office in December 2021, worked off a budget framework crafted by her predecessor, Mayor David Martin, who’d kept costs down out of concern over the economic downtown brought on by the COVID-19 pandemic.
The tax increase last year was low – 1 percent on average. But this year it could be five or six times that, or more, depending on the individual property revaluation.
For that reason, elected officials on the Board of Finance, the first to get the mayor’s budget proposal, last week cut $7.5 million. They took most of it, $6.3 million, from the city side and only $1.2 million from schools, even though each side spends about half the total budget each year.
Not small enough
The finance board’s action reduced Simmons’ requested 3.7 percent budget increase to a 2.5 percent increase.
“The Board of Finance did a good job making cuts, but it wasn’t enough,” city Rep. Nina Sherwood, the Board of Representatives majority leader, said Thursday. “The mayor did not want any more cuts to the operating budget or Board of Education budget, but the sentiment on the Board of Representatives was that we had to get the tax increase down to 2 percent. So a deal was struck. We pulled $5 million out of the (school construction) reserve.”
In a letter sent to the board before its Fiscal Committee meeting Wednesday, Simmons said her staff has been working with city representatives “to determine a path forward that would satisfy the board’s desire to find additional cuts to the city’s budget and our need to continue to deliver services to Stamford residents and mitigate the tax burden.”
She agreed to a $15 million contribution to the school construction reserve over her original request for $20 million, Simmons said, but she thinks further cuts would jeopardize reconstruction of Westhill High School and other projects that have received state aid.
“While I would have preferred that the full $20 million remain in the budget given the enormity of the work ahead of us … I am confident that we can absorb this reduction and the city will still be able to meet our commitment to our large capital school construction projects,” Simmons said.
City Rep. Sean Boeger, co-chair of the Board of Representatives’ Fiscal Committee, said “several factors (had to be) considered to find a reasonable balance.”
Placing $20 million aside for future construction expenses last year saved the city millions of dollars in interest should the money have been raised by issuing bonds, Boeger said.
Board of Finance Chair Richard Freedman has said the city would pay $8 million in interest over 20 years if it bonded $20 million instead of raising it using a tax levy.
“It was a sound idea that resulted in a minimal tax increase and a significant savings to taxpayers,” Boeger said.
But 2023 is not 2022, he said.
The ‘reval’ result
“This year, many of us realized that there would be varying impacts due to the reval, so in an attempt to be sensitive to that, some of us wanted to keep the budget increase as close to 2 percent, or less, as possible, while still executing the fiscal plan of placing capital funds to the side for the looming school construction,” Boeger said.
Without cutting $5 million from the school construction reserve, the budget increase would be 3.5 percent, not counting the revaluation effect, instead of 2 percent, he said.
“Many of us did not feel that was reasonable, given the fact that many households are contending with high inflation, and varying degrees of additional impact that will result from the property revaluation,” Boeger said.
Last year’s property revaluation reflected skyrocketing home prices in Stamford and the rest of the state after buyers and renters fled New York City and other congested places during the pandemic.
Simmons has said the revaluation increased the value of multi-family homes in Stamford an average of 36 percent; single-family homes 25 percent; and condominiums 14 percent.
Until they get their tax bills in June, property owners will not know how much more they will pay in taxes for the fiscal year that starts July 1.
City Rep. Lindsey Miller, Boeger’s Fiscal Committee co-chair, did not respond to a request for comment Thursday.
Simmons’ chief of staff, Bridget Fox, and director of policy and legislative affairs, Lauren Meyer, did not answer a question Thursday about how much of a tax hike would be acceptable in this revaluation year, given that the mayor wanted a new budget 3.7 percent bigger than this year, and city representatives insisted on a tax hike of no more than 2 percent.
Freedman, the finance board chair who spearheaded the effort to create a school construction reserve last year, also did not return a request for comment.
But two members of his board said they, and city representatives, should have taken a harder look at the Board of Education budget. After the finance board cuts, the city budget increased only 1 percent, but the school budget increased 3.9 percent, they said.
“I wish the money that was cut had come from the Board of Education budget directly, instead of the building reserve,” finance board member J.R. McMullen said. “It just doesn’t feel like the Board of Education has the taxpayers’ best interests in mind. I’m sure they have the students’ best interests in mind, but they have to strike a balance between what taxpayers can afford and what the students get.”
He’s “good with the deal that was struck,” said McMullen, a former city representative.
“It met the goal I had, which is a tax increase of no more than 2 percent,” McMullen said. “My concern is that the Board of Education has not shown much budgetary constraint, and the Board of Finance and Board of Representatives need to step in and impose that.”
His fellow finance board member and former city representative, Dennis Mahoney, said the large tax hike will hit residents hard.
“I’m disappointed that the boards did not have the appetite to cut more from the budget,” Mahoney said. “Right now, the average homeowner, with the effect of the reval, is going to see about a 5 percent tax increase, and that is unfortunate.”
But the tax rate is yet to be decided, Mahoney said. That will happen May 15, when the finance board sets the mill rate.
During that meeting, members first will “set all the reserves, the revenue estimates, and the contingency,” Mahoney said. After that, the board will, most likely, set two mill rates, he said.
“One will assume $15 million for the school construction reserve, and one will assume $0 in that reserve,” since it’s ultimately up to city representatives to decide whether to set aside the money, Mahoney said. “The Board of Reps will have to pick one or the other.”