From: Susan Kniep, President
The Federation of Connecticut Taxpayer Organizations, Inc.
Website: http://ctact.org/
email: fctopresident@ctact.org
860-524-6501
April 9, 2005
Thank you to all who have been keeping FCTO current on
local and state issues. Because of the
many communications I have received, I have divided our 47th Edition
of Tax Talk into Two (2) Segments which I am emailing separately. Thank you for working so hard to protect the
interests of taxpayers in our towns and State.
I appreciate your maintaining an email database of
taxpayers within your organizations to whom
you are forwarding our Tax Talk publications and other news alerts. I am reducing the font at your requests to
accommodate you in forwarding this information.
Please note that FCTO is also providing to those towns
and taxpayers who do not have a website a service wherein we will publish your
news alerts and information on the home page of our website to which you can
direct your members or others who have an interest in what is transpiring in
your home town. Just email that which
you would like posted and I will communicate directly with you prior to
posting. We will distinguish similar to
what we have done for the East Hartford Taxpayers Association at
http://ctact.org/
WELCOME TO THE 47th EDITION OF TAX
TALK
Part 1
Review
Previous Tax Talk Issues on our Website at http://ctact.org/
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Budget of the United States Government, Fiscal Year 2006
http://www.whitehouse.gov/omb/budget/fy2006/
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House Bill 6447 -- Thank you to all who responded to the call to urge our State
Representatives to approve Bill 6447. Bill 6447 provided a reform to Binding
Arbitration which would have protected a town’s undesignated reserve fund from
being factored into union contract negotiations in arbitration. Bill 6447 was ultimately dramatically revised
to allow a town to retain only 6% of their general fund balance. This was
in contrast to the initial intent of the Bill which would have protected 100%
of the 169 towns’ undesignated reserve funds (savings). Currently, towns cannot save to purchase big
ticket items as the unions will attempt to seize these savings in arbitration
to distribute among their membership in wage and benefit increases. A town is then forced to purchase big ticket
items through bonding which adds significant costs to taxpayers in interest
payments.
Although
the Bill as presented was ultimately revised, some members of the State’s
Planning & Development Committee refused to support even the 6% proposal
which was approved on a 7 to 11 vote. I will soon be forwarding to you the Bill
as passed and the names of those who refused to support it. We will continue to monitor Bill 6447, as
it moves on to others committees.
Although we had hoped Bill 6447 would have passed as initially
presented, we must remain vigilant to support its passage in its current format
and continue to work for initiating substantive reform to Binding Arbitration.
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UP-TO-DATE STATS ON CONNECTICUT’S LONG TERM DEBT
1994-2003: http://www.osc.state.ct.us/2003cafr/statistical/netgeneral.asp
Year
2004: As
of the end of Fiscal Year 2004 (the latest CAFR numbers, still unaudited), outstanding bonded
debt totals were as follows:
General Obligation Bonds:
$9.6 billion;
Transportation
Bonds: $3.2 billion;
TOTAL
OUTSTANDING
$12.8 billion
For FY 04 the state paid
$965.3 million in principal and $647.2 million in interest.
The
per capita payment required to eliminate the debt is $3,680.
For Fiscal Year 2005 $1.7 billion was budgeted for debt service payments
(representing 12% of total appropriations). This appropriation is not broken
down between interest and principal, at the end of FY 05 this office will know
how much was actually expended in each category; however, we do not have this
information presently. You may want to check with the
Treasurer, since that office prepared
the debt service appropriation request for FY 05 and may have a breakdown.
Nancy Wyman, our
State Comptroller, provides a great service to the public both in making
information readily accessible through her website and also by quickly
responding to requests such as up to date information on
bonding. Unlike other officials, she has also stepped forward and
denounced our bonded debt which continues to grow.... The following will
take you to information through her office which I think you will find
interesting. Happy exploring...
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State Comptroller
http://www.osc.state.ct.us/
Bonding
http://www.osc.state.ct.us/finance/
Bond Allocation Data Base
http://www.osc.state.ct.us/finance/options.htm
Search by Municipality
http://www.osc.state.ct.us/finance/queries/municipality.asp
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Donna McCalla, ctjodi@sbcglobal.net
Subject: Education
Budget Analysis FY 2005-2006
March 31, 2005
See Attached 2006 Education Budget
Hi, all. As you can see in the attached, updated
Education Analysis spreadsheet, a lot of data on Connecticut educational
budgets has come in during March. As you know, educational budgets come
in first since they comprise the largest percentage of a municipal budget; I am
only now getting municipal (town) spending numbers recorded. Despite the additional data, not much has
significantly changed in the past month.
In the initial spreadsheet I sent you in late February, the average
statewide Grand List growth was 2.17%.
It is now up to 2.47%, still a significant increase over last year’s
average GL growth of 1.23%. Several
communities had extraordinary GL this year, which skews this 2.47%
average. However, there is no doubt
that, despite the “anomalies”, there was significantly greater grand list
growth in Connecticut this year. And that is not attributed to revaluation… to
factor in revaluation growth would make your jaws drop. Last month, the average Superintendent’s
Initial Proposed Budget Increase was 7.74%; it is now an average of 7.59%. This is all statistically consistent with
last year’s average of 7.67% increase.
Last month, the average Board of Education approved budget increase was
6.98%; that has now dropped slightly to 6.81%.
This is also statistically consistent with last year’s average BOE
approved budget increase of 6.79%.
It would appear, after collecting this data for three years
and studying the trends, that Grand List growth has little influence on the
average Superintendent’s initial proposed budget increase, nor the ultimate
Board of Education approved budget increase. Year over year in this three year study, the
Superintendent (on average) asks for about a 7.5% budget increase, and year
over year, the Boards of Education reduce that requested increase by about 1%. There are, of course, always exceptions. The form of government in the 169 towns
greatly influences the numbers, and that is true whether we are talking about
education spending or municipal spending.
Those towns governed by Boards of (or First) Selectmen and Town Meeting
forms of government have consistently higher spending increases, which appear
to be mitigated slightly by higher GL growth; those governed by other Boards
(such as Town Councils, RTMs, Aldermen, Boards of Apportionment and Taxation, etc.)
have far lower spending increases which tend to equal Grand List growth, plus
or minus .5%. Please note that I
extracted regional school districts in the “Averages” summary in this latest
update to the spreadsheet (which is relevant to about half of you.) Regional district spending increases are
lower than statewide averages of all local school districts – but even that
number is significantly skewed by Region 8 (RHAM – Hebron, Andover and
Marlborough), which of course is historically typical and therefore not
unexpected. The column on
“Town or BOF Approved/Recommended Increase” includes not only originally
recommended increases, but also
funding authority approved education budget increases as of this date. As you will note, that number is now at 4.76%
for all school districts; 4.75% for just municipal school districts; and
5.13% for regional school districts only (5.13% is not statistically
significant, since we currently don’t have regional boards of finance –
although it appears that is about to change due to pending legislation.) This is the most important column to
review, especially as it changes over the next month and funding
authorities vote on various budget components. As has been historically
seen, these averages are about half of BOE approved budgets, and tend to be the
ultimate voter-approved increases, although, of course, there are always anomolies. To reiterate: my source of data is as
follows: phone conversations and emails
with Business Managers and Finance Directors; minutes of meetings; newspaper
articles; and conversations with chairmen of various Boards or First Selectmen
of various towns. If you see any errors in your town’s data, please let me
know, as the education budgets will be in flux for at least the next month during
which funding authorities vote on final budgets to send to taxpayers. Since Monroe goes to its first referendum
next week (I believe their historical average is 3-4 referendums to pass a
budget; perhaps that’s why they start so early…) , it’s time to turn attention
to the Tax Increase Comparison spreadsheet of the 169 municipalities, which I
hope to have out within a week. That
spreadsheet will be in the same format as I have sent you in the past couple of
years. Approximately 30 funding
authorities have already voted on the budget that they are sending to
taxpayers, and this number is expected to grow significantly over the next two
weeks. With the first week in May being
the “heavy hitter”, I expect a lot of data to be coming in. Any questions,
let me know. Thanks, Donna
P.S. A couple of you have told me you have trouble
opening the spreadsheet. If you do have
trouble, download the spreadsheet and save to some directory on your hard
drive. Then, using Windows Explorer,
right-click on the file, click “Open With” and then click “Excel”.