State of Town Message Shows Budget Pressures

Under a "worst-case scenario" five-year town budget "forecast" in which estimates of revenue are minimized and spending wish lists from each department are granted, Darien would need to raise taxes 6.5 percent for the 2012-13 fiscal year.

According to the five year forecast, that hike would be followed by one of 6.1 percent the next year, and then lower rate increases in succeeding years of 1.7, 3.3 and 2.7 percent.

Those projections were given by Board of Finance Chairman Liz Mao's "State of the Town" message before the Representative Town Meeting on Monday. First Selectman Jayme Stevenson, Planning & Zoning Commission Chairman Fred Konze and Board of Education Chair Elizabeth Hagerty-Ross also gave "State of the Town" addresses to the RTM.

Mao cautioned that the projected tax hikes are unlikely to be as severe as the forecast—town officials will look for spending decreases, and worst-case revenue predictions often are worse than the actual revenues.

In fact, Mao said after the meeting that she was pleasantly surprised at P&Z Chairman Fred Konze's address, which indicated that a number of real-estate projects might bring in more taxes when they're built over the next several years.

"[P]lease look at these projections as if they were a worst case scenario, and recognizing that the forecast is just that, and not a budget," Mao told the RTM. "During the budget season starting in January, we will have the opportunity to carefully look at the budget. Historically, we have been able to trim it."

Perhaps more useful than the projected overall numbers are the specific budget areas that are driving the potential tax increases. Mao identified special education funding, which is unpredictable, but which has been growing steadily.

The total town budget would rise from $115 million to $123 million, a 6.9 percent increase. Of the 8 million increase, $4.3 million comes from the education budget:

• $1.2 million comes from increased personnel costs, both as a result of more projected hiring and the proposed teachers union contract, which raises salaries at a lower rate than in the previous contract.
• $0.95 million comes from less revenue coming in, like state aid.
• $1.5 million comes from expenditures on fixed costs.
• $0.6 million comes from an increase in operations costs.

"I wanted to show you visually how inexorable the rise in Board of Education spending is projected to be," Mao told the RTM. "Despite the negotiation of contracts providing for much lower raises going forward, we are still seeing big rises in personnel costs because the BOE projects adding people, despite a flattening of student enrollment.

"This will call for careful scrutiny and a vigorous discussion by the Board of Education, the Board of Finance and by you, the RTM."

In addition to the education budget, which takes up 65 percent of the Darien budget, the "town" budget would have more moderate increases. The town budget is made up of the debt service budget and the town operating budget. The town operating budget, which includes all other town expenditures, would increase from $37.3 million this fiscal year to $39.3 million in the next fiscal year, a $2 million increase.

Most of that increase—$1.3 million—comes from debt service, including the controversial Shuffle plan. The shuffle plan would cost taxpayers an extra $263,000 as a first-year payment which would then only increase to more than $500,000 a year in the next four years.

The biggest additional cost in bond payments, however, would come from the first payment on the Police Department headquarters renovation—$579,000. The Weed Beach project is projected to cost $113,000 in debt service in the first year that project gets funding. Money to pay for sewer projects will also start for the first time, adding $30,000, and new payments for "issuance cost" of bonds will start to be included in the budget to the tune of $70,000 per year.

The other part of the increase in town expenditures comes from the town operating budget, which would increase by $600,000. Much of that comes from a $147,000 increase in medical and dental health insurance coverage. Another $166,000 would come from an increase in pension and medical costs for police.