Finance OKs budget, but state impact still unknown

The Board of Finance this week voted forward a city budget for 2017-18 that leaves taxes and city services pretty much the same for next year.

But that could all change during the final phase of the budget-setting process if the looming state budget hits Milford with millions of dollars in cuts to state aid.

Milford’s finance board voted Wednesday night in favor of a $207.9 million budget plan for 2017-18, which is up $3.4 million from the current $204.5 million and marks an increase of 1.7%.

Despite that slight increase, due to an increase in taxable property in the city, the plan would drop the mill rate slightly from 27.84 to 27.73. That is a .4% decline in the tax rate, which Mayor Ben Blake described as “essentially a flat budget.”

The plan now moves to the Board of Aldermen for final approval, but as the budget stands now, residents should not see much change in their tax bills next year.
State unknowns
But there are still unknowns that could change the picture.

Some members of the finance board had considered taking those unknowns into consideration as they voted on the budget plan, but Mayor Ben Blake advised them to vote the plan forward to the Board of Aldermen to deal with possible state aid reductions.

Calling the state budget plan “the big elephant in the room” and “like the Storm Sandy of financial implications” for Milford, Blake said he and city department heads will work together to come up with several different budget scenarios to present to the Board of Aldermen just in case the state cuts millions of dollars in Milford revenue, as the governor’s budget plan currently calls for.

City officials have said Milford stands to lose $11.1 million in state aid next year, and that figure could be more like $13 million depending on how the numbers are interpreted.

The state already cut the Education Cost Sharing grant (ECS) this year from $11.2 million to $10.8 million, and the governor’s proposed budget for next year cuts the entire remaining $10.8 million in ECS funds, leaving Milford zero ECS dollars.

In addition, the state budget plan leaves Milford with a Pequot Grant cut of $3,617, and a  PILOT (payment in lieu of taxes) for colleges and hospitals cut of $419,820, according to City FInance Director Peter Erodici.

“The state is also proposing to have cities and towns share in the annual contributions that need to be made to the Teachers’ Retirement System,” Erodici said earlier in the budget process. “Milford’s share would be approximately $5,581,054. This would be a major new expenditure in our budget which also has the same effect as a cut in revenue.”

Adding in those teacher retirement contributions, the total “cuts” affecting Milford’s general fund amount to $16.8 million.

“However, the state increased some other grants and proposes to allow a hospital property tax, so the net loss, after those adjustments, amounts to about $11.1 million,” Erodici said.

But the mayor put the impact at around $13 million, saying he would not agree to taxing Milford Hospital $1.5 million each year as the governor’s proposal suggests.
Tight Milford budget
Finance Board member Joseph Fitzpatrick suggested that residents start writing their state representatives and other members of the legislature to protest a state budget plan that he said penalizes a number of municipalities while “bailing out” others.

The $18 billion state budget for 2017-18 proposes about $1.4 billion in spending cuts, along with about $320 million in new revenues, to help close a $1.7-billion budget gap.

Milford’s city budget plan is already conservative, Mayor Blake said. It eliminates at least three jobs in the Public Works Department, plus 14.4 teaching positions and three paraprofessional positions in the schools.

The five-member finance board voted unanimously in favor of the proposed city budget this week. Brian Lema, board chairman, praised the mayor and department heads for doing “a fine job” keeping the budget within acceptable parameters.

Lema said the board received several letters from residents asking that they not reduce the school board spending plan. The board made a technical cut, but otherwise left the school board’s request alone. The board had asked for $40,000 for an additional school resource officer, but since that wasn’t matched on the city side of the budget, the finance board Wednesday night voted to subtract that from the board’s request. The school board’s request was $92,336,582 and is now $92,296,582, marking a historically low .74% increase over the current spending plan of $91,611,950.
When the numbers come in
It’s hard to say what will happen between now and mid-May when the city budget is finally approved by the Board of Aldermen.

Mayor Blake said he and School Supt. Dr. Elizabeth Feser and city department heads will be doing a lot of work in the coming weeks to create at least three alternative budgets, in addition to the one that the finance board approved.

Blake predicted that the city’s spending plan will be different when it’s finally approved. He’s hoping that the Board of Aldermen will have a better idea of exactly how much Milford will receive from the state after the state appropriations committee meets April 27.