Published May 02. 2012 4:00AM
No one can blame New London taxpayers for feeling beleaguered, confused and angry.
After just a few weeks in office, Mayor Daryl Justin Finizio announced that the city confronted a fiscal crisis. That was startling news coming from the first mayor elected under the new form of government city voters had approved, jettisoning the city manager system in favor of vesting executive authority in an elected mayor.
The seeming success of recent City Councils and city managers in holding the line on taxes was in fact illusory, announced the mayor. Revenue projections from taxes, investments and other sources of income had been consistently overestimated and the cost of providing some city services low-balled.
Mayor Finizio pegged the cumulative result of the budgetary manipulation at a jaw-dropping $12 million over three years, a figure including a deficit for the prior fiscal year, a projected deficit for the current fiscal year and the impact of a built-in shortfall for the coming fiscal year, beginning July 1. While the actual number will likely turn out to be a few million short of that, the essential point was correct - New London was living beyond its means and reality had caught up with it.
Adding to the confusion, some on the council argued that the numbers were not as bad as the administration claimed. Perhaps, but the numbers were certainly not good. Then came the mayor's proposed budget for the 2012-2013 fiscal year, an $87.1 million proposal that would have sent the tax rate up 20 percent.
After much slicing and dicing, including an 11th hour additional cut of 2 percent for most departments beyond reductions already made by its finance committee, the council Monday approved an $83.1 million budget that is projected to increase taxes around 8 percent when the council sets the tax rate. The owner of a home assessed at $200,000 is facing a roughly $300 tax increase.
That is far preferable to the nearly $1,000 tax hike the same owner would have confronted under the mayor's initial proposal.
While Mayor Finizio deserves credit for presenting an honest budget to the council, his solution to maintain city services with a massive tax increase was politically unpalatable and potentially devastating to homeowners. The council deserves credit for significantly paring it down.
This is more a problem of insufficient revenues than excessive spending. Board of Education spending rises 1.8 percent, not enough to maintain current staffing, nevermind meet the needs of a struggling school system. General government spending goes up 1.23 percent. In reality, argues Mayor Finizio, the city faces major cuts in services and layoffs, because the current spending plan was not realistic to begin with and inflationary pressures and contractually mandated pay increases have only added to the fiscal burden.
A reduction in revenue projections accounts for much of the tax increase. The city is anticipating a 97.1 percent tax collection rate - down from the 98.6 percent used for the current budget - an estimate that the mayor says is more realistic in reflecting recent trends in city tax collection. The city is also projecting decreases in state aid.
Because he is satisfied the revenue projections are realistic, Mayor Finizio told us he plans to sign the budget. He spoke in the abstract about the pain it will inflict on city services and personnel, warning that attempts to cut it further, by rejecting it at referendum, "will cripple the city of New London to a point where we may not recover."
Come next Monday at 6 p.m. at New London High School and the public hearing on the budget, the administration needs to be ready with specifics. What positions, services and programs are being cut? What would be the implications of even deeper reductions and a smaller tax increase?
Mayor Finizio, an attorney by training, needs to make his case or face a taxpayer insurrection.