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04/26/2016 04:00 PMWith no clear word from Hartford on the state budget, Madison officials are racing against the clock to cover a $3 million adjustment in the town budget. After taking a $1.5 million health care increase and a possible $1.5 million cut in the Education Cost Sharing (ECS) grant, local officials are working on creative solutions to fill the budget hole and hold the line on taxes.
At the second Budget Public Hearing on April 19, members of the Board of Finance (BOF), Board of Selectmen (BOS), and Board of Education (BOE) met at Polson Middle School to discuss the issue and reassure the public that they are working to fix the problem.
The initial $1.5 million health care increase, which was described as unavoidable, was taken in early in the budget process. The Town of Madison self-insures and this year saw costs rise above average after years of being significantly below the norm. BOF Chair Joe MacDougald said the town would have been able to handle the health care increase in stride, but the compounding ECS cut has created a bigger problem.
The self-insurance increase “was something we were handling, but it is a very large number,” MacDougald said. “That combined with the potential of another $1.5 million means a $3 million impact to the town. This is larger than being hit by a hurricane.”
The news of the ECS grant cut, a grant given to municipalities by the state to help run their schools, came on April 12 after Governor Dannel Malloy released a revised budget showing $43 million in cuts to ECS statewide. Under the governor’s proposed budget, Madison is at risk to possibly lose $1,576,061.
While the $1.5 million ECS reduction is only a proposed number, to prep for the possible impact, the town has taken several steps to secure the budget including implementing an emergency freeze on town spending and asking the BOE and BOS to go back and look at reducing their budgets.
“How do we make up the $1.5 million?” MacDougald asked. “One source is spending less in the current year so that we have a greater return, the second is budget reductions, and the third is the BOF using our rainy day funds to try and consolidate all of this” to make up the $1.5 million.
In addition, per the BOF recommendation, the BOS voted to move the budget referendum date back from Tuesday, May 10 to Tuesday, May 24 to allow the town as much time as possible to obtain final numbers.
“We delayed our referendum ‘til May 24,” said MacDougald. “That is the latest day we can go per our charter. The idea is that this is a fluid situation up in Hartford and it is absolutely in our interest to get the number right.”
For now, getting the number right is tricky as budget numbers up in Hartford continue to change as the state works to fill a $900 million budget deficit in the next fiscal year. The full extent of ECS cuts may not be available until midnight on Wednesday, May 4 when the legislature is scheduled to adjourn, and possible even later if the legislature rolls into special session.
MacDougald said he hopes the state will have exact numbers before the town goes to referendum so that the budget does not need to be artificially decreased, a move that could present more problems in the coming years.
“If the budget is artificially decreased and then we replenish it through the year by special appropriation, when you look next year, year over year, even if we are spending the same dollars, we are going to look like we have a giant increase,” he said.
Many Madison residents at the budget public hearing said they understood the need to talk about cuts, but said the town needs to start thinking more proactively about increasing its revenue streams. First Selectman Tom Banisch said he shares residents’ concerns and it working to try and increase revenue in town.
“Our economic development director is looking at a lot of things so that we can increase our commercial base,” he said. “One of the problems is our commercial base is less than 10 percent, which means residents are paying all the taxes. If we could increase that base, it is not a short-term fix, but it is something we are working on.”
As the town awaits news from Hartford, MacDougald said board members will continue to prep the budget to the best of their ability and keep residents informed.
“I think we have three separate boards that are working together and are in a position to be able to come to a good plan,” he said. “It is going to be very difficult, but Madison has always looked ahead and has always reserved and this is the reason why.”