With up to four months left before New London begins its budget process for the 2014 fiscal year, Mayor Daryl Finizio and City Council President Michael Passero are expecting that some increases may be necessary.
“You are going to see some more revenue correction,” Finizio said. “The state is pulling back on how much they’re giving the cities and towns.”
Passero also expects that revenues will be an issue during the budget cycle. He said municipal aid might be cut as part of state efforts to close a budget gap.
“The big driver of next year’s budget is going to be the state revenue streams, and all the signals seem to be ‘Prepare yourself for cuts,’” said Passero.
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Passero said the city is currently working to stay within the 2013 budget and may have to make supplemental reductions in the event of overspending, since the general fund is largely depleted. He said the council will receive a report on the second quarter of the fiscal year at Monday’s meeting, which he thinks will better reflect the financial state of the city. A first quarter report projected close to a $1.2 million deficit due to overspending and revenue shortfalls, but Passero said it did not reflect changes later in the year such as reducing the staffing per shift at the New London Fire Department.
Finizio said expenditures in the 2013 fiscal year are lower than the 2012 fiscal year. However, he said the city’s workforce has also gone down by 15 percent, leaving some departments understaffed. Finizio said the New London Police Department has 26 fewer police officers than three years ago. He said those positions are not being filled, but the staffing level also raises the question of when there is an impact on public safety.
Finizio said there have also been delays in some services. Trash pickup is only occurring within regular hours so as not to run up overtime costs in the Department of Public Works, resulting in some collection delays.
Passero said he expects that the 2014 fiscal year will include a modest increase for the New London Public Schools, which are operating on a . Dr. Steven Adamowski, a special master appointed to the district by the state, has criticized the funding level as unsustainable, saying New London has the longest period of flat-funding for the schools at five years.
“The only thing we know for sure is that the school board has negotiated two new contracts that require an increase, which they told us ahead of time would require an increase,” said Passero.
Passero said the council will have to decide whether to make further cuts or increase taxes if there is a projected budget increase for 2014. Finizio said he expects a tax increase, but a smaller one than was approved for the current fiscal year. He said several factors, including fuel costs and a current reassessment of property values, will also affect the budget. However, Finizio was optimistic about the future, saying factors such as the lapse in a tax abatement on the Electric Boat property should stabilize finances.
“After we get through this year, on the city side we should be at a sustainable tax rate for several years,” he said.
Residents recently received revised tax bills for the 2013 budget year reflecting the outcome of that tumultuous process. A referendum on the municipal budget of $41,264,459 is scheduled for November, but Law Director Jeff Londregan advised the city to operate under the approved budget for the remainder of the fiscal year, which ends June 30. The budget also increased the tax rate 5.1 percent to 26.6. A referendum vote in September defeated a $42.3 million budget with a 7.5 percent tax increase.
Under the City Charter, Finizio must present the council’s Finance Committee with a preliminary 2014 budget by April 1.