Officials approve $120.4 million budget for borough
NAUGATUCK — The borough’s budget and mill rate are heading in opposite directions as officials face uncertain state funding and wean off what Mayor N. Warren “Pete” Hess called “phantom revenue.”
The Joint Boards of Mayor and Burgesses and Finance on Monday approved a $120,436,078 budget for the 2017-18 fiscal year.
Overall, the budget is decreasing $492,296 from this fiscal year’s budget. However, the mill rate will increase 0.88 mills, or about 1.8 percent, to 48.55 mills.
Under a 48.55 mill rate, a taxpayer with property assessed at $150,000 would pay $7,282 in taxes, an increase of $132. A mill is $1 for every $1,000 of assessed property value.
The mill rate is going up despite the budget decrease due to a drop in revenue and conservative estimates for state funding.
This fiscal year’s budget uses about $3.7 million from the general fund — a one-time revenue source — to pay for ongoing budget expenses, Controller Robert Butler said.
The money from the general fund was used to help keep the mill rate from going up drastically this fiscal year as the borough dealt with expenses, including a legal settlement with Veolia North America, the private company that runs the wastewater treatment plant, and debt payments for the Naugatuck High School renovation project, officials said.
Hess said the 2017-18 budget eliminates the “phantom revenue.”
“We have also stopped kicking the can down the road and started spending on roads and other things,” Hess added.
The budget also takes a conservative approach when it comes to state funding because it’s unclear when the state legislature, which is dealing with a massive deficit, will approve a budget and what municipalities will receive in aid.
“The elephant in the room for Naugatuck, and every town, is really the state of Connecticut,” Hess said.
Among the unknowns is how local car taxes will be impacted. The state capped the mill rate on cars at 37. That cap is set to drop to 32 in 2017-18 under state law. The drop from 37 to 32 mills would mean a loss of about $700,000 in revenue, which is expected to be reimbursed some by the state.
Hess said the state could keep the cap at 37 mills, but until that is known officials are going by what the law says.
“No one knows where it’s going to go,” he said.
If the cap is lowered, any additional revenue from car taxes is likely to go to the general fund, which officials want to grow.
Burgess Carl Herb said he knows officials want to increase the general fund, but taxpayers don’t see it that way. He said they see it as the mill rate going up.
The joint boards combed through the budget on Monday making some final minor tweaks. The biggest change was removing $220,000 from the reserve fund intended to start putting money aside to pay for a new firetruck. Those in favor of keeping the money in felt it was wise to start saving for the truck, while those against it argued that it would be better to lease the truck when it is needed.
The reserve fund allocates money from the general fund for capital items, and taking the money for the firetruck out of the budget didn’t impact the mill rate.
A little more than half of the total budget is for the Board of Education. The school budget is $61,683,651, which is the same spending level as this fiscal year and the year before.
The school budget can’t be decreased by state law because Naugatuck is considered an Alliance District, the 30 lowest-performing districts in the state.
Residents can force a referendum on the municipal and school budgets by getting 8 percent of voters to sign petitions to do so by 4 p.m. on May 22.
The budget approval came four days after a public hearing on the plan. Nine members of the public attended the hearing. Those who spoke raised concerns about increasing taxes.
Catherine Mieth of Bluebird Drive said she wants to see more factories in town to bolster the grand list.
“I don’t think you’re being conservative with the budget,” Mieth said during the hearing. “Every year I come here, the mill rate goes up. Put something in here that’s going to draw revenue into the town so you can lower my taxes so I can sell my house when I retire and get the hell out of here. Don’t tell me that you’re doing something for me because you’re not.”
The Republican-American contributed to this article.
Correction: This story has been corrected to reflect that petitions to force a budget referendum are due May 22, not April 22 as originally published.