State’s financial issues weigh heavy as borough begins crafting budget

Naugatuck Senior Center Director Harvey Frydman, center, presents the center’s budget request to the Board of Finance Jan. 28 at Town Hall. –LUKE MARSHALL

NAUGATUCK — Borough officials have begun crafting the 2019-20 municipal budget amid ongoing concerns over what the state will do in the face of another projected deficit.

“Our governor (Ned Lamont) has come out with a lot of things he would like to do, but he also has a fairly significant deficit he has to deal with,” Board of Finance Chairman Dan Sheridan said.

Sheridan, speaking during a Jan. 28 budget meeting, said what, if any, municipal aid the borough can expect to receive from the state is in question. He said the finance board will have to take a conservative approach while crafting the budget.

“What we are going to do is scrutinize any major increases closely and put them on a list for final review when we get more clarity coming out of Hartford as to what kind of impact, positive or negative, it will have on our budget,” Sheridan said.

The finance board began hearing budget requests from department heads in late January. The budget meetings will continue up until early April, after which the budget will be presented to the Joint Boards of Mayor and Burgesses and Finance and go to a hearing in May.

Sheridan said any larger requests, such as an expected request from the Naugatuck Police Department for an additional officer to serve as a school resource officer at City Hill Middle School, will be put on hold until the board holds its final review of the budget.

Police officials were scheduled to present the department’s budget request last week, but it was pushed back until Feb. 25.

Sheridan’s sentiments come after the state failed to come through on funding promises made to municipalities.

The borough lost about $200,000 when the state did not fund its Circuit Breaker Program, which provides tax relief to lower-income elderly and disabled residents, Sheridan said.

Also, the state hasn’t fully funded its pledge to municipalities after capping the car tax. The cap, which was set at 32 mills in 2017 and increased to 45 mills recently, was intended to even the playing field some for residents in municipalities with higher tax rates.

The state was supposed to reimburse municipalities with tax rates higher than the cap the lost tax revenue. However, the full reimbursement never materialized, Sheridan said.

“We have already seen two instances recently where the state has reneged on promises,” Sheridan said.

Sheridan added the state cut funding to the councils of governments across the state, which meant the borough’s dues to the Naugatuck Valley Council of Governments increased $5,000.

Two proposals being mentioned in Hartford have caught Sheridan’s attention — a plan to increase the state sales tax rate from 6.35 to 6.85 percent and shifting a portion of teacher pensions onto municipalities.

Senate President Martin M. Looney, D-New Haven, is proposing to generally allocate revenue from the 0.5 percent increase in the sales tax to municipalities where the sales occur, the Republican-American reported.

“Looney said this will help us maintain state aid. So, it may mean if they don’t do that, they will be looking to cut municipal aid. Then we might have to absorb that,” Sheridan said.

Former Gov. Dannell Malloy last year proposed shifting one-third of the cost for teacher pensions onto municipalities. The measure was voted down.

If it had gone through, Sheridan said, it would have cost the borough $4 million, which equals 3 mills.

“We shouldn’t be liable for a fund we have no control over. That’s just crazy,” Sheridan said.

As the Board of Finance moves forward with crafting a budget in the coming months, officials will hope for the best and prepare for the worst.

“The only thing we can do right now is try to be conservative,” Sheridan said.