Bart Shuldman: Tax Increase Could Have Been Avoided

Alert “06880” reader and frequent commenter Bart Shuldman writes:

I watched the September 2 video of the Board of Finance meeting, and was surprised to learn Westport just finished the fiscal year with a $4 million surplus — even though 2 months ago the decision was made to raise taxes.

From what I listened to, the revenue in Westport came in a bit higher but costs were much lower. One cost center, Public Works came in over $600,000 lower in costs which had to be known, yet the finance director in Westport did not project that (and other lower costs) just 2 months back.

When disaster strikes, Westport's Public Works Department responds.

When disaster strikes, Westport’s Public Works Department responds.

How could the finance director not know this while a discussion as going on about increasing taxes? If the Board of Finance knew that we would end the year with a big surplus (over 2% of the budget), would we have avoided a tax increase? I am told: yes.

Not only did the costs come in much lower, the Board of Education returned $180,000 back to the town. I guess the constant request of needing more money for our school system was not needed last year.

These tax increases hurt our senior citizens the most. With low interest rates and low returns in the stock market, anyone who is retired has a difficult time if their costs increase. Now these residents face increased taxes in Westport when it should have been avoided.

The good news is our first selectman and Board of Finance have done a great job controlling costs. They clearly deserve our thanks. But now it’s time to get a functioning finance department in Westport that can forecast better, especially with just 2 months to go. Not being able to provide the necessary information to our Board of Finance regarding our financial results as we get close to the end of the fiscal year is very concerning, and resulted in an unnecessary tax increase.

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Town finance director Gary Conrad replies:

In May we projected a conservative $2.5 million surplus. Because of this, the Board of Finance set the mill rate using $4.1 million dollars of fund balance to reduce the tax increase. So in effect we used the whole $4.0 million surplus to reduce taxes while the mill rate increase was only .84%. Department of Public Works savings were achieved due to lower solid waste costs and the deferral of building maintenance, tree maintenance and parks and recreation property maintenance.

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2nd Selectman Avi Kaner — a former chair and 8-year member of the Board of Finance — also responds:

Westport’s annual budget stands at over $200 million. Our town department heads and the Board of Finance work diligently to control our expenses and report to the public on a monthly basis.

Westport sealBecause the Board of Finance did not meet in August, the resulting surplus was discussed in September. The amount of the surplus caught the members by surprise given the values shown in July.

The good news is that any budget surplus enters into the town’s general reserves and is available to defray any tax increase. The Board of Finance has been pegging the town’s reserves at a conservative 11%, aggressively paying down long term debt, fully funding our pension obligations, and maintaining our AAA rating.

When the Board of Finance sets the mil rate again in about 8 months, the surplus will be used to lower the change in mil rate once again for that fiscal year. We will work with the finance department to more accurately forecast revenues and expenses on a monthly basis.

7 responses to “Bart Shuldman: Tax Increase Could Have Been Avoided

  1. It’s patronizing to assume there will be any surplus down the road. Everyone knows the psychology of budget surpluses….there’s plenty of money just ask for it or better yet just overrun your budget! Here’s a novel idea, change the budget and lower the taxes….but then again that’s not what government does, or is it?

  2. One of the vey good things about Westport is, in my opinion, its reliable and smart financial planning and management, especially as compared to most othe Fairfield county towns. I wish I could have remained in Westport, but try finding a ranch there these days.

  3. Elisabeth Keane

    Is it wise to defer maintenance?

    • Good question, Elisabeth. The deferral of building maintenance, tree maintenance and parks and recreation property maintenance is NOT wise. Take a look around at our Town-owned buildings and properties – the answer becomes abundantly clear. Deferral has lead to further degradation. Degradation has led (or will lead) to total loss or to higher expenses later to remediate small problems that have grown big.

  4. Thank you Bart Shuldman for always keeping your finger on the pulse to let us know most things that one is not as aware of.

  5. Gary-if there was a $4.1 million fund balance BEFORE you knew there was going to be an additional $1.6 million in savings-then it is fair to say we could have applied that extra savings and not had a tax increase? As was stated, the extra savings was not known when the tax increase was approved. During the BofF meeting in September everyone was surprised by the extra savings, as presented by you. So realistically there was no way to include that savings when the tax increase was approved because you have now said you did not know we would have that much savings the last 2 months.

    Now was it a coincidence you baked in a $4.1 million fund balance in the new fiscal budget that seems now to equal the higher revenue and the new ‘news’ of the lower costs the town incurred?

    Interesting.

  6. don l bergmann

    Since the arrival of Gary Conrad as our Finance Director, I have regularly been impressed with his knowledge, hard and thorough work, follow up and the generally conservative approach he takes in addressing Town finances. Westport is fortunate to have Gary Conrad.
    Don Bergmann