Canton officials wrangle with challenging budget cycle
Updated Friday, April 19
Next up in the budget process:
• The budget Public Hearing will take place on Thursday, April 25, 2024 at 6 pm (NEW DATE!) at the Canton Community Center, Room F.
• The Budget referendum
At the May 7 referendum, electors can vote yes or no on a final budget plan, which could, potentially, be adjusted the evening of April 23. The referendum takes place from 6 a.m. to 8 p.m. on Tuesday, May 7 in the Canton Community Center.
By John Fitts
Staff Writer
CANTON – While municipal budgeting is never easy, the town has dealt with particularly acute challenges in preparing its 2024-25 spending plan.
Most notable was the 5-year property revaluation that resulted in a 47 % increase in residential real estate values, officials said. Commercial and personal property values also rose – 21 % and 5.58 % respectively. At the same time, vehicle values decreased 5.55 %.
The combination of those factors further shifts more of the tax burden to those local homeowners and even a flat budget would result in a more than $500 tax increase for the median homeowner, according to town officials.
The proposed fiscal year 2024-25 budget is $49,526,294, a 5.94 percent increase in spending over the 2023-24 approved budget of $46,7474,934.
Approximately 99 percent of increases involve maintaining existing town services, according to officials, who also note that some large capital expenditures were taken out of the spending package and will now be proposed as bonding projects.
The Board of Selectmen operating budget is proposed at $12,504,271, a 5.92 percent increase in spending.
There are a few new initiatives in the Board of Selectmen proposal, included half-a year’s salary to bring on an additional police officer in January of 2025 and the return of an operator/maintainer position for the Public Works Department.
In his message to residents in the annual budget mailer, First Selectmen Kevin Witkos said the Board of Selectmen carefully reviewed the budget line by line, embracing “efficiency and consolidation wherever and whenever possible.”
“Town of Canton staffing levels are minimally maintained while providing the best customer service possible. Many of you have asked for increased police presence and better road maintenance,” Witkos wrote.
The Board of Education budget proposal is $33,447,742, an increase of 5.36 percent.
Special Education, Health & Benefits, and Contractual Salaries had major impacts on the education budget, which also seeks to keep a high standard of education, according to officials.
“This budget reflects our unwavering committeemen to providing top-notch education for all, regardless of background or circumstance,” Board of Education Chairman Lou Daniels wrote in the town’s budget mailer. “It prioritizes investments in our dedicated educators, recognizing their pivotal role in shaping students’ lives. By empowering them with training, resources and fair compensation, we aim to cultivate an environment where every student can excel.”
The Capital Improvement Budget is proposed at $1,208,416, a 2.88-percent increase in spending.
The Board of Finance budget, much of which is debt service, is proposed at $2,365,865, a $344,286 or 17.03 percent increase from the current budget.
In addition to rising expenses, the town is also dealing with other budget factors, such as a
$160,000 cut in the Education Cost Sharing revenues from the state of Connecticut, a move officials say is largely based on a sharp rise in the median household income over the past two decades.
Tax Increase and revaluation phase-in proposal
Of the $49,526,294 proposed budget, approximately 86.1 percent of it, or $42,672,939, would be funded from local taxes.
Property is assessed at 70 percent of its market value based on the town’s mill rate. A mill is $1 of property tax per $1,000 of assessed value. As the town notes, homeowners can multiply the assessed value of a home by the mill rate and divide by 1,000.
With a revaluation, property values can shift, and the town can adjust the mill rate to compensate.
For examples, the town has used the owner of “median” home that has a market value of $310,418 and an assessed value of $217,293.
Under a four-year phase in, the mill rate would be 34.85 for 2024-25 and that homeowner would pay $7,573 in taxes, an increase of $641.
If the revaluation were implemented, that home would have an assessed value of $281,260. In that case, the mill rate would go from 35.37 to 28.50 for 2024-25, but due to the increase in value, that median homeowner would pay $8,016 in taxes, an increase of $1,084 over current taxes.
The phase-in approach was recently endorsed by the Board of Finance and the Board of Selectmen and approved at town meeting April 18.
The town presented some new examples that evening and noted that the phase-in savings would be offset to some degree by motor vehicle taxes. Additionally, those residents whose residential property was assessed at a growth rate of less than 37.56 percent would pay more over the four years due to the phase in. See more about that meeting here.
Controversy
The budget, as proposed, did come with some controversy.
Before getting to the final numbers, the Board of Finance on March 25 directed the Board of Selectmen to cut $60,000 from its proposed budget and the Board of Education to cut $150,000. At that meeting, the Board of Finance added $325,000 for the town’s fund balance (or reserves) as members felt the amount in that account was, in light of some potential emergency expenses, too close to the minimum that should be retained, which is about 16.6 percent of the town budget – or enough to operate the town for 2 months. That becomes important when the town seeks bonding and for other initiatives.
At that March 25 meeting, Board of Finance member Tom Blatchley advocated much deeper cuts, suggesting at one point that school administration could be an area to look at.
“These budgets just keep ballooning and there just doesn’t seem to be any sense of fiscal responsibility to monitor what’s going on or even to renegotiate these contracts,” he said. “I don’t know how the taxpayers are going to sustain these increases and I’d love to hear other members of this board explain to me, based on the numbers that we have before us, how the taxpayers can sustain it.”
At a subsequent Board of Selectmen meeting, which did take place prior to the detailed discussions on a phase-in approach, Witkos accused the Board of Finance of not doing its job with a budget that included large increases in taxes. He also said the Board of Selectmen should have only borne one third of the cuts.
“First of all, I should say I’m not pinning one budget against another budget because it’s all going out to the taxpayers,” he said. “But if we’re looking at our budget specifically. Everything that we do within our budget impacts everybody in the town. We are one third the size of the Board of Education budget… . Whatever cut or reduction that is seen from the Board of Education, we should be one third of that if you’re comparing apples to apples.”
At the March 27 Board of Selectmen meeting, as selectmen struggled with where to trim, Witkos said it was nothing compared what could come if residents vote down the spending plan.
“I think if we present a budget to the voters after we’ve made these cuts and they vote the budget down again, we’re really looking at draconian cuts,” he said.
At an April 3 Board of Finance in which the majority of its members endorsed the phase-in approach, Blatchley disagreed that the revaluation should “stand on its own” and again asserted that the budgets are artificially high. He called the phase-in proposal and bonding insults to taxpayers.
“What we’re not looking at is cuts and reducing the spending. So, it is a band-aid effect in my opinion, and I just don’t think it will be approved by the taxpayers. I don’t think it should be approved by the taxpayers. I think it’s just overspending – again – year over year. And I would again respectfully request that the board consider looking at ways to reduce the budget to help our taxpayers. We can and will maintain the services. We hear the same arguments from both sides about, you know, the town’s going to fall apart. Trust me, it’s not going to if we make cuts and further cuts are in order and should be expected from both the town and the Board of Education.”
Board of Finance member Brian Miller said that the phase in is a “no brainer” that allows residents to carry smaller increases throughout the period, saving them money over time, not just in the first year.
He also strongly disagreed with Blatchley about the ability to achieve deep cuts and maintain services, calling that a pipe dream.
“You keep referring to major cuts that can be made without cutting town services. I think that’s a pipe dream,” Miller said. “At some point, as Lou Daniels said, we’re going to be cutting people; we’re going to be cutting teachers. There’s not this magic pocket of inflated budgets somewhere in the budget for which you have not pointed out a single item that you’ve identified as being as being an inflated item. You just keep referring to I believe there [are] cuts to be made. Beliefs are one thing and actually working through a budget and finding that information is another. And, while, yes, we could maybe cut a little bit more money, last meeting you were talking about cutting a million dollars from the Board of Education. That was your proposal in percentage. And that is impossible to accomplish without cutting services to this town. Same for the Board of Selectmen. The $500,000 cut or more that you were suggesting is impossible to accomplish without cutting services to this town.”
On April 3, Kenney acknowledged the budget challenges and the worry of how the budget would be received. She noted that the Board of Finance did have the ability to make further adjustments at the April 23 Annual Budget meeting. She advocated working to get the word out and for people to attend that meeting and raised the possibility of some adjustments if that’s what people call for.
“I’d rather hear from residents before we make further cuts,” Kenney said. “I think we need to know what the townspeople think. If we have a packed room of people who are saying these expenses are too high and we would rather see our services cut than pay this much, then that very night, we can respond and make further cuts to Board of Education and Board of Selectmen budgets and that will be what goes to referendum.”
Next steps
The town will hold its annual budget meeting at 6 p.m. April 25, also at the Community Center. Final budget numbers will be adopted that evening and they could be different than what is now proposed.
The budget referendum will take place from 6 a.m. to 8 p.m. on Tuesday, May 7 in the Canton Community Center. The town’s charter states that a turnout of less than 10 percent results in automatic passage of the budget. Voters have never met that threshold since the charter was changed to require an automatic budget referendum beginning in 2020 (Due to the pandemic the change was implemented in 2021).
