Bd. of Finance to Selectmen, Bd. of Ed.: Show Us 4 New Budget Options, from Flat to -10%

Tuesday evening, Wilton’s Board of Finance put together its guidance for the Board of Selectmen and Board of Education for moving forward on the budget for FY2021, asking them to provide four scenarios for revising their proposed budget requests:  keeping flat to FY2020 appropriations, reducing those numbers by 2%, reducing by 5%, and reducing by 10%.

The BOF voted 5-0 to ask the other boards to look at how those different cuts would impact the services they provide to residents.

The first three scenarios were initially suggested by BOF chair Jeff Rutishauser, who prepared a spreadsheet for the meeting mapping out what those scenarios would look like and how they fit into the town’s mill rate model for setting taxes. Working off the numbers used in FY2020, and including projected savings the town will see this year, those calculations worked out as follows:

  • Keeping the FY2021 budget flat to FY2020 would result in a mill rate reduction of -2.3320%
  • A 2% decrease from that would result in a mill rate reduction of -4.4466%
  • A 5% decrease would result in a mill rate reduction of -7.6186%

Interestingly, Rutishauser also prepared a mill rate model for the original budget proposals submitted before the COVID-19 public health crisis. The BOS had submitted a $33.9 million proposed budget (1.22% increase) and the BOE had submitted an $84 million proposed budget (2.58% increase). Even with those proposed budget increases, the mill rate would decline, although almost imperceptibly at -0.0205%.

Rutishauser did not have a model prepared ahead of time for a 10% reduction because that scenario was proposed at the meeting by BOF member Chris Stroup. He explained the reason he wanted to ask for such a dramatic reduction was because he’s concerned with how the town will cover any shortfalls in tax revenues if the COVID-19 crisis shutdown severely impacts Wilton residents–and more people than expected don’t pay their taxes.

“I’m still unclear as to how we finance ourselves if we are disappointed in revenue collection,” he said.

Finance board member Mike Kaelin said the 5-10% reduction wouldn’t be “realistic”.

“I think if the voters saw what services they would lose at 5% or 10%, they’re not even going to take it. We’re not even going to be able to consider it. If we want to make this a useful tool, something is within the realm of what I think is possible, I think we should have the ranges closer together.”

Stroup later said he didn’t actually support a 10% reduction but that the board needed to account for all possibilities–including sustained problems with collecting taxes beyond just six months.

“What if we get to October, November, and December and our collections are substantially less than our longterm expected collections,” he said, adding, “I’m not concerned about the long term, I’m concerned about how we finance the intermediate-term, something that goes beyond the three months stress test that’s already been done…I just don’t know what happens when the bank account runs to zero.”

He too expressed a desire to see what services would be lost with such a severe cut.

“I’d just like to understand how drastic cuts would be, what it would mean to services in town in the next year. So if we just didn’t collect the taxes we anticipated, meaning the taxes that we expect over time will look like, because … I’m much more anxious about the 12- and 24-month delay or deferral in the collection of taxes.”

Rutishauser said that while it would be unlikely that Wilton would encounter such a drastic scenario or wouldn’t be able to cover any cashflow issues, he said the exercise of seeing what a 10% reduction would look like is worth doing.

“It’d be interesting to see what a 10% reduction from today would be. And I think a lot of people would look at it and say, ‘That cuts pretty deeply into the services that we value.”

The Board of Selectmen met later in the evening but did not discuss the budget cut scenarios. It next meets on Monday, May 4. The Board of Education will meet this Thursday, April 23.