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The original item was published from 4/19/2020 10:00:24 AM to 5/1/2020 5:05:03 PM.

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Posted on: April 19, 2020

[ARCHIVED] Mayor Rilling on the Operating Budget

Rilling Headshot 300x300

My team will be presenting my revised budget proposal to the Board of Estimate and Taxation (BET) on Monday, April 20. I wanted to take this opportunity to provide the public with some insight into how I came to my recommendation and what it means for taxpayers in the coming year.

My team and I start planning for the next fiscal year’s budget in October and November for presentation to the BET and Common Council in early spring. This allows deliberation, discussion, and ample time to make the hard decisions on what services and programs need to be funded and to eliminate requests which are just nice to have.

Nearly two months ago, based on my recommendation, the Common Council set a budget cap, or spending limit, of $385.6 million, which is an increase of 4.9% over the current year’s budget. The budget provided a $9.9 million increase (5%) to the Board of Education, which is the largest ever for the District. At the same time, the budget funds essential City services.

The Budget was in the final stages of adoption when our Nation was hit by an unprecedented emergency - the arrival of the COVID-19 pandemic. On March 15, Governor Lamont issued Executive Order 7C, which postponed municipal budget cycles for 30 days.

Those additional 30 days have now elapsed, and we must move forward with the budget process. The extra time has allowed me and my team to re-examine our assumptions and the financial scenarios in the budget I recommended two months ago. That revised proposal will be presented Monday night.

I had three major objectives when creating the revised budget proposal. 1. To decrease the burden on taxpayers, 2. To build in a cushion for unexpected revenue loss or increased expenditures due to the pandemic and 3. Refrain from making drastic changes while in the middle of the crisis. My revised budget proposal accomplishes all three goals.

When we initially prepared the budget, the City’s Grand List, the total value of all taxable property, was not finalized. When it was completed, the Grand List had grown by over $400 million that was not part of the original budget assumption. That provided the City with roughly $8 million in tax revenue that was not anticipated in the original scenario.

With this unexpected revenue, I am recommending we use $3 million in this year’s budget to lower the mill rate and reduce the tax burden on residents and hold $5 million in reserves to offset the impact of COVID-19 in next year’s budget. Due to the coronavirus pandemic, our future assumptions indicate lower tax collection rates and additional lost revenues. The $5 million cushion is just the best guess, however, as no one knows what the real impact will be when the dust settles. That means there is a possibility that we’ll need to make mid-year adjustments or dip into the Fund Balance, aka the Rainy Day Fund.

While I do not know what the future holds, I am recommending we proceed as planned. I believe it does not make sense for us, in the middle of this crisis, to start cutting the budget haphazardly. That means keeping the budget at $385.6 million for Fiscal Year 2021. With an additional $3 million used for tax relief, we were able to reduce the tax increase by almost a full percent from the initial proposal. The average tax bill will increase per month as follows: First District: $13.50; Second District: $12.67; Third District: $16.25; Fourth District: $17.33; Fifth District: $25.58; and Six District: $50.17.

Other municipal governments are struggling in this situation, and Norwalk is extremely fortunate. Through strong financial management and planning, we have a healthy Fund Balance which allows us to stay the course while providing flexibility for the future. I am confident that we are prepared to handle whatever comes our way. That means residents will continue to receive the quality and quantity of services they need and deserve. I am confident the BET and Common Council will approve this revised budget in the weeks ahead.

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