Finance board workshop considers future mill rate options



The Board of Finance held a budget workshop last week to discuss the possibility of, and the effects of, implementing a financial model for creating fiscal year budgets that includes an anticipated mill rate increase. The financial model would use certain levers, including anticipated revenue and expenses, state grant income, and grand list growth, to determine an agreed, reasonable mill rate increase year to year.

Last year, elected boards including the BOF, Board of Education and Town Council wrestled with balancing the budget after facing a $5 million cut from the state. Officials expected a mill rate increase up until a few days before the Town Council held their vote to adopt the budget.

The state then swept in with funds for Southington, and as a result, the BOF was able to offer a zero percent mill rate increase.

“Every time we come forward with a zero percent tax increase, some would say that’s excellent work, but if you look a little deeper, it didn’t really happen due to excellent work,” said BOF chair John Leary (R). “It was due to a chance in the state. But the question is, do we want to have a very predictable increase in the mill rate as part of a long-term plan and not just let it fall out where it is?”

BOF member Tony Morrison suggested that a steady and consistent mill rate increase would aid in predictability for business owners and residents in town.

“Should the taxes increase every year, and if they increase by more than what we need, what we’re doing is essentially taxing people and the government is taking possession of their money and holding it to use later,” said Leary. “Some would find great fault in that, but on the other hand, when you look at us trying to weather these storms that appear, having that money from last year to use this year keeps the mill rate smooth for businesses, for people who are here doing projects, for homeowners.”

Leary said the BOF would be against holding on to taxes for more than a year, as it would be unfair for a resident who may be in town for a short period of time to pay higher taxes, move out, and then not benefit from those services.

“There are philosophical issues and risks to having a minimal mill rate increase. If the taxes are not needed, it is essentially over-taxing. Fiscal conservatives would assert that money is best in their pockets and not in the hand of the government,” Leary said. “With a minimal tax increase we need great discipline or a fiscal policy to ensure the money is used in the following year to fund the standard budget and not applied to expand government. Then there must be a ceiling so there is not an excessive build up. The objective is to have a smooth controlled mill rate to avoid spikes and offer predictability.”

Town manager Mark Sciota cautioned the board on basing all future numbers off of the last fiscal year, which was an unusual year due to unexpected cuts.

“Last year’s budget cycle was probably the most chaotic budget cycle, certainly in my 20 years. It compounded on itself,” said Sciota. “The budget was let with holes everywhere. I think the town did well in the end but it was very difficult, and I wouldn’t want to start going forward saying, ‘let’s go forth because of the problems we had in last year’s budget cycle.’”

Sciota said having an honest revenue side from the governor, which the town has traditionally received in past years, would help the Town of Southington plan the best budget.

“As a business owner, homeowner, and part of the community, I like to know where I stand, and I think setting a goal is smart,” said BOF member Susan Zoni (D). “We will have some unknowns, and we might have to move here and there, but to come in and just randomly take a number out of the air and cut it—I don’t like doing that.”

Joe Labieniec (R) said the BOF has not established what a successful budget is, which has made it difficult to see a successful budget when it comes before the board.

“It’s like using a GPS to travel without setting a destination,” he said. “We don’t know when we’ve arrived.”

The conversation will continue at the December BOF meeting, and the board will continue communication with other elected officials and the public to solicit feedback.

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