Name: Coronavirus pushes cities and towns to adopt budgets without tax increases, despite financial uncertainty
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Coronavirus pushes cities and towns to adopt budgets without tax increases, despite financial uncertainty

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AdvertisementBy Hartford CourantMay 02, 2020 at 6:00 amLeaders of some cities and towns across Connecticut are proposing budgets without tax increases to ease financial burdens on taxpayers, despite fear that municipal revenue will decline due to the coronavirus pandemic. AdvertisementWest Hartford Town Manager Matt Hart proposed a 3.7% tax increase in March, before the coronavirus closed Connecticut businesses and hundreds of thousands of people were left unemployed.In late April, town leaders decided to cut $9.8 million of expenditures from the proposed budget to result in a tax decrease of 0.14% to help residents who might be struggling financially.Advertisement“We’re very concerned about the impact of this crisis on our property taxpayers,” he said. “So consequentially, leadership have asked me to submit revisions that would eliminate a property tax increase.”In addition to adjusting the budget, Hart said he has initiated a spending freeze and laid off 130 part-time workers.“Over the past several weeks the COVID-19 crisis has literally changed the world, with some very significant ramifications for our economy,” he said. “We know we stand to lose significant revenue, during the last quarter of this fiscal year, and, to accommodate that shortfall, we have initiated a spending and hiring freeze.”According to the state Department of Labor, 430,000 Connecticut residents have filed for unemployment and many more are expected to in the coming weeks.Connecticut Conference of Municipalities spokesperson Kevin Maloney said it’s too early to tell how much impact the coronavirus will have on cities and towns in Connecticut. Nonetheless, he said, many towns are looking for ways to prevent tax increases.“Certainly with the economic crisis that has descended, we’re expecting towns to keep taxes to a minimum,” he said.The combination of unexpected pandemic expenses like protective equipment for emergency personnel and extra information technology services, combined with a predicted decline in revenue doesn’t paint an optimistic picture.Municipalities are faced with the reality that some residents won’t pay their taxes on time, but services such as public schools, waste removal and other services still need to be provided.Advertisement“Everyone’s expectation is that this great recession is going to continue through the next fiscal year for sure," Maloney said. "Even as the rest of the world hunkers down, municipal services must continue. Services residents get from their town are the most direct services they get from the government and they look to town hall first when they have needs.”In New Britain, Mayor Erin Stewart has proposed a budget without a tax increase, saying residents and businesses can’t afford to pay more taxes now.Stewart said the 2020-21 budget will be hard, but the following year shapes up as much, much tougher. She is pushing the city council to come up with ideas for new revenue sources long before then.“It’s time for us to collectively roll up our sleeves and come to the table with new ideas. New Britain doesn’t have a spending problem, it has a revenue problem,” she said.Many towns, like Middletown and West Hartford, are allowing residents to defer on their tax payments until later in the year if they are facing economic hardship. Still, tax collection rates are expected to drop across the state, despite more lenient policies.“Right now many towns are seeing shortfalls in their revenue collections for this fiscal year and that’s going to impact what they need to do to get to June 30," Maloney said.AdvertisementIn New Britain, Stewart said the city is preparing to refinance and restructure debt as soon as officials believe the lowest interest rates are available.“We’ll see the impact on cash flow when taxes come due — I anticipate August and September will be scary months,” she said.Middletown Mayor Ben Florsheim also proposed a no tax increase budget, but he plans to do so without cutting support for local schools and city services.“The COVID-19 pandemic has made this a particularly complicated time to make budget decisions,” said Florsheim, who is preparing a budget for the first time since his election last November. “We are only beginning to glimpse the toll that COVID-19 is going to take on our economy, and while we’re hoping that most of our emergency expenditures on things like personal protective equipment will be reimbursed by FEMA, it will be a while before we know for sure.”Unlike other municipalities — some of whom have avoided tax increases by cutting funds to school budgets or social services — Florsheim said it’s still important to invest in the community.Advertisement“With so much uncertainty out there, the council and I will need to be creative in how we get this done,” he said.Like West Hartford, Manchester leaders were also forced to rethink their budget when the pandemic hit Connecticut.On April 14, the town adopted a budget with no general fund tax hike. The approved $195 million spending plan is about $3.45 million less than the initial proposal.“We are addressing not only the most serious health crisis in our lifetimes, but an economic challenge that soon may also be historic,” Mayor Jay Moran said.Other towns are adopting tax increases, but are consciously keeping them to a minimum to limit the tax burden on residents.In Wethersfield, Town Manager Gary Evans proposed a $111.8 million budget with a 3.41% tax increase. Evans said that the average taxpayer in Wethersfield would see a $265 increase in their tax bill.Advertisement“In developing the budget, staff and I kept the needs of the public and the provision of services at the center of discussion,” Evans said.As it happensGet the latest updates on Coronavirus and other breaking news events happening across Connecticut &gt; In his budget address, Evans acknowledged that the coronavirus pandemic has made crafting a budget that meets residents’ needs for town services and financial security difficult.“Tough times require tough decisions,” he wrote. “There are a lot of unknowns for our community over the next few months. Therefore, I see the need to make a number of difficult choices ahead of the upcoming year and these decisions are reflected in the proposed budget. The main function of government is to provide services to town residents and businesses."As Connecticut municipalities wonder what the year will hold, CCM is hoping that the state and federal government will set aside funds to help cities and towns make ends meet.According to guidance from the U.S. Department of Treasury, states can issue federal coronavirus relief funds to local governments if the expenditures are necessary public health or safety measures.“There has been progress made in gaining support for additional direct funding for states, as well as critical support for direct funding for municipalities with populations in excess of 50,000," executive director Joe DeLong said in a statement. “We are continuing to push for direct funding for all local governments. Along with our efforts advocating for additional federal assistance, CCM is continuing to urge Gov. Lamont to share a portion of the $1.38 billion in revenues received from the Coronavirus Relief Fund of the CARES Act with local governments.”AdvertisementCourant staff writers Don Stacom, Jesse Leavenworth and Steve Goode contributed to this report. Kathleen McWilliams can be reached at . Advertisement

AdvertisementBy Hartford CourantMay 02, 2020 at 6:00 amLeaders of some cities and towns across Connecticut are proposing budgets without tax increases to ease financial burdens on taxpayers, despite fear that municipal revenue will decline due to the coronavirus pandemic. AdvertisementWest Hartford Town Manager Matt Hart proposed a 3.7% tax increase in March, before the coronavirus closed Connecticut businesses and hundreds of thousands of people were left unemployed.In late April, town leaders decided to cut $9.8 million of expenditures from the proposed budget to result in a tax decrease...

Coronavirus pushes cities and towns to adopt budgets without tax increases, despite financial uncertainty

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