There is a way out of Norwalk's current budget crisis. But it will take some compromising and not everyone will be completely satisfied. Below is a proposal that I hope can become the framework for productive discussions.
When Tom Hamilton, Norwalk's finance director, made his original budget recommendation several weeks ago, everyone noticed that it would require roughly a 5.5% increase in property taxes. Common Council and Board of Estimate members said they were not pleased with so hefty a tax hike and would work to establish a final budget that kept the tax increase below 5%. I think that can be achieved. And I also think the Board of Education's budget can be increased from 3.8% to 6.23%, which is what the BOE needs to avoid program cuts. Here's how:
The Council would need to increase its cap by one million dollars; that would still keep the tax increase below 5%. The Council would also recommend to the BET that the extra million be earmarked for the BOE.
The BET would need to withdraw from the undesignated fund balance an additional million, again with the money earmarked for the BOE. This fund balance withdrawal – added to the projected withdrawals for the 2007-08 and 2008-09 budgets – would still enable Norwalk to project an undesignated fund balance for the 2009-10 fiscal year that was roughly 6.7% to 6.8% of total revenue. Hamilton has indicated that he would be comfortable if Norwalk matched the median percent fund balance for Connecticut towns and cities with AAA ratings, which is 6.9%. The additional draw down would leave us close to that goal.
The increased cap and the additional draw down from the undesignated fund balance would leave the BOE about $1.3 million short of what it needs to avoid cuts in the school system. The BOE would have to assume that the remaining funds would come from Hartford. With the governor's educational proposals, it's a safe bet that the city would receive at least that amount. Moreover, should the BOE received funds in excess of $1.3 million, those funds would be returned to the fund balance. (If there is a shortfall of funds from Hartford, the BOE would have time before next August to make emergency cuts.)
This can be done. We can keep the tax increase below 5%. We can maintain a healthy rainy day fund. And we can properly fund our school system.
Bruce Kimmel
