Yes, Malloy will Cut! No, He Won’t! Wilton’s Budget Outcome Up in the Air
Thursday, April 14—Yesterday, news broke that Gov. Dannel Malloy had proposed a state budget targeting Wilton as one of 28 towns whose education funding would be completely eliminated next year. The bombshell announcement that he had cut Wilton’s expected $1.46 million Education Cost Sharing (ECS) Grant shocked town officials and residents alike.
Malloy’s reduction was more than twice what the Appropriations Committee had planned to cut; its proposed budget had slashed $603,000 from Wilton’s ECS Grant. The cuts are Hartford’s answer to closing a projected $922 million deficit for FY ’17. By law, CT must have a balanced budget, one that is passed by the legislature.
By midday Wednesday, however, state senator Toni Boucher notified Wilton officials that Malloy’s budget had been rejected by the CT General Assembly, and the legislative majority was at work on an alternative budget. What reductions that budget would bring is still up in the air, however.
In fact, no one knows what budget will end up being approved by the legislators. Wilton’s state representative, Gail Lavielle gave GOOD Morning Wilton an overview of where things stand. Lawmakers will need to start negotiating with Malloy, as he may not necessarily concede and throw out his proposed plan. There will now be a lot of back and forth for a while between the governor and the majority, and select input and commentary from the minority. It’s up in the air as to what elements the legislators and the Governor might keep, might throw out, or even if they’ll settle on anything at all by the deadline.
What’s the deadline? Legislators and Malloy are supposed to finalize a budget by midnight of May 4, the last day of the legislative session, and both chambers are supposed to vote on it. It’s possible that Wilton will not know the final outcome until then⎯or possibly even later. If the budget isn’t formalized or passed by May 4, the General Assembly will need to go into special session, which may drag on, even beyond the July 1 start of FY ’17 in a worst-case scenario.
What’s more, says Lavielle, there may also be cuts to the municipal side of Wilton’s budget. Worse still, the state’s budget gap may grow even larger, after the April 15 tax deadline comes and goes and CT possibly sees further revenue shortfalls in the current fiscal year, which will carry over to next year. It’s likely that Hartford will not even begin to try and negotiate until those figures are tallied my the middle of next week. Any way you cut it, says Lavielle, the worry is that ‘wealthier’ towns like Wilton, Westport, New Canaan and Ridgefield may still see deep cuts.
“Most legislators in Connecticut do not represent affluent towns, and they have no reason to accommodate towns they consider wealthy. So as negotiations move forward, it’s distinctly possible that the ‘wealthier’ towns will remain a target for significant cuts. This won’t necessarily be the final outcome, but it’s prudent to understand that it is a real possibility and at least to plan for a contingency,” she said.
While Wilton’s Board of Finance had prepared for some expected cuts in the proposed town budget they adopted last week, Malloy’s complete elimination of Wilton’s total ECS amount was especially alarming and unexpected. The BOF reacted to the news of Malloy’s budget reductions by scheduling a special meeting for tonight.
BOF chair Jeffrey Rutishauser emailed his fellow board members, first selectman Lynne Vanderslice, Board of Education chair Bruce Likly, and school superintendent Dr. Kevin Smith as well as Wilton’s legislators Lavielle and Boucher, inviting them to the meeting “…to discuss the financial impact and solutions of the recently announced potential significant reductions of municipal aid coming from the state.” He put an item on the meeting’s agenda: “Mil Rate Deliberations⎯if Needed.”
In his email, Rutishauser apologized for the short notice, adding that, “…this ‘surprise’ came up on us pretty quickly.”
One Day Too Late
However, town officials later learned that there’s not much they can do at this point, because Wilton’s Town Charter (Section C-30, E1) specifies that the proposed budget becomes locked in and unchangeable 21 days before the Annual Town Meeting:
- C-30. The procedures for setting the annual Town budget and the rate of taxation through and including the Annual Town Meeting.
“(The Board of Finance) . . . at least 21 days prior to the date of the Annual Town Meeting shall recommend to the Annual Town Meeting a budget for the ensuing fiscal year of the Town (the ‘recommended budget’) and the rate of taxation (the ‘recommended rate of taxation’) necessary to support the same.”
This year’s Annual Town Meeting is scheduled for Tuesday, May 3; 21 days prior to May 3 was April 12⎯just one day before Rutishauser called a special meeting to potentially adjust the proposed budget. That means that the proposed budget can no longer be changed before the Town Meeting on May 3.
One of the people who pointed out the Town Charter restriction to town officials was former first selectman Paul Hannah. He emailed the BOF, Vanderslice and Likly (and GOOD Morning Wilton) to notify them that, per the Charter, no changes could be made before the Annual Town Meeting.
He cautioned against reactive moves, and advised officials against changing course. He suggested that the town consider looking to the fund balance to make up any difference if cuts are announced after Wilton votes on its town budget.
“I note that the State budget is not likely to be passed until May 4, and so any action taken by the Town meeting on May 3 will be based on speculation, informed though it might be, rather than real knowledge.
“I hope there will not be a push to increase taxes or reduce BoE or BoS spending further at this time. It is my view that Malloy’s bombshell is the sort of unusual circumstance for which fund balances are provided.
“Of course, [the] May 3 Annual Town Meeting may reduce budgets and hence tax rates, but no action may be taken before.”
Rutishauser accepted that any discussion of potentially changing the mil rate and proposed budget at this point “was moot.’ However, he still plans on going ahead with the meeting to discuss other options.
“Since the Hartford situation is still fluid, it is still a meeting we should have to understand from our state representatives the situation in Hartford and feed back to them our disappointment with the process by which this large (as yet unknown) ECS budget amount was abruptly introduced late into our municipal budget approval process,” he says.
Lavielle cautioned about jumping to any conclusions, but said it might be wise to prepare for the worst as well as plan for the future. “The biggest issue now is uncertainty—not only regarding how big any cuts may be, but also how long it will be before we know for sure. Negotiations can end quickly, or go on for weeks or months.”
Is there anything that might work in Wilton’s favor? Lavielle says some legislators are working on options.
“One of the scenarios we are discussing in Hartford is whether towns like Wilton would be able to escape state education mandates if they were to receive no state ECS funding. If it is possible to save significantly by cutting out unfunded mandates, that is something we must look at very seriously.”
Where things will shake out is still to be determined.