Finizio: New London Facing $2.7 Million Net Revenue Loss Under Gov. Malloy's Budget

Mayor Daryl Finizio said he anticipates a net loss of $2.7 million in revenue to New London if Gov. Dannel Malloy’s state budget is approved as proposed.

Finizio, in speaking to the Finance Committee on Monday, said most of the shortfalls would come from the state but that some local revenues must also be adjusted for expected losses. However, Finizio stressed that the numbers are estimates and likely to change as the Connecticut General Assembly works on the budget.

“I’m very confident that the proposal that came from the governor is not going to be the ultimate adopted state budget,” said Finizio. “We have to wait to see what actions they take.”

State shortfalls

Finizio said the largest cut from the state revenue relates to revenue sharing from the Mohegan Sun and Foxwoods casinos. He said this represented a drop from $1.8 million to New London to $233,000.

“In other communities throughout the state, this is going to zero,” said Finizio. “The reason why we even still have that almost quarter million is because we’re one of the affected communities due to our proximity to the casinos.”

Other projected shortfalls include:

• Pilot funds, decreasing from $5,129,000 to $4.7 million
• Revenue sharing, cut from $425,000 to zero
• State owned property payments, cut from $400,000 to zero
• Public school transportation funds, cut from $268,000 to zero

Local revenues

Finizio said he plans to make conservative revenue estimates in putting together the municipal budget for the 2014 fiscal year, which will be presented to the City Council by April 1. He said state figures are likely to be adjusted by the time the council is ready to approve a budget, but that some local revenues are also likely to see a decline.

Finizio said the 2013 fiscal year budget included an estimate of $475,000 in revenue from building permits. Budget projections show a current shortfall in this budget, but Finizio said the estimate was made on the expectation that work on the Village on the Thames residential project at Fort Trumbull will begin within the fiscal year. Finizio said he expects the city will realize this revenue, but that the slow real estate market makes a similar amount of revenue in building permits unlikely for the next fiscal year.

Other local shortfalls include:

• A decrease in distressed municipalities funds from $1.6 million to $1,520,000
• A decrease in private haulers revenue from $650,000 to $600,000
• A decrease in Water Street Parking Garage revenue from $50,000 to zero
• A decrease in pilot funds for machinery from $30,000 to zero
• A loss in rent at the Masonic Street municipal building from $25,500 to zero
• A decrease in magnet school transfers from $394,00 to $370,000

Finizio said the total expected loss of revenue between state and local projections is about $3.73 million, but that expected revenue increases in Education Cost Sharing, misdemeanors, recordings, and police protection services will offset the loss by about $1,038,000. Finizio said the city is also working to keep expenditures within budget.

“We’re working very diligently with our department heads, and we’ll continue to do so, to constrain and reduce city spending to adjust for this and to lessen the burden that may be placed upon taxpayers,” he said.

Council reaction

Councilor Donald Macrino, chairman of the Finance Committee, said he was dismayed with the report. However, he also commented that such problems are occurring in municipalities across the country and that the council should use discretion in creating its budget.

“I think this is where discipline has to come into play,” said Macrino. “We can’t just continue to take from our citizens.”

Council President Michael Passero said the city should make a stronger effort to garner revenue from areas such as uncollected taxes. He said the city might also consider privatizing the Water Street Parking Garage.

“There should be revenue coming from something like that, or we should turn it over to a company that can generate revenue for us,” said Passero.

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