An Update on Madison’s Budget Situation with Democratic Board of Finance Member,
What is the status of Madison’s budget for 2016-2017?
At its meeting on March 16, the Board of Finance tentatively adopted a budget that preserved, without any cuts, the budgets presented by the Board of Education and the Board of Selectmen and that fully funded Madison’s new Capital Improvement Plan (CIP). Despite an increase of $1.5 million in health insurance costs next year for the town and the schools, the BOF accomplished this with a projected 2.5% increase in the mill rate by allocating the reserve it had accumulated over the last two years to the CIP ($650,000), to writing down the mill rate ($750,000), and to a rainy day reserve fund ($500,000). However, since the BOF’s March 16 meeting, the unresolved state budget is threatening to unbalance Madison’s new budget before it even gets to referendum. First, the Appropriations Committee of the legislature proposed a budget that would cut funding for Madison’s schools by $800,000, the amount by which Madison is “over-funded” by a hold-harmless provision in the state’s formula for aid to school districts. A few days later, the Governor released a new budget that totally zeroed out state aid to school districts for Madison and 21 other towns. The Governor lumped Madison in with very wealthy, mostly gold coast towns that have an average mill rate much lower than Madison’s.
What does this mean for Madison’s budget?
In the face of this uncertainty, the BOF held a special meeting on April 15. To buy time, the BOF postponed the budget referendum from May 3 to May 24, the latest date we are allowed to hold our referendum. The hope is that the state budget situation will be resolved by then. However, in order to hold a referendum by May 24, the BOF must finalize its budget by May 4 to allow time for the budget to be printed twice in the local paper. The Board also conferred with both the BOS and BOE to come up with a plan to ensure that, in the worst case, the entire burden of the new budget shortfall does not fall on the school system. Both boards have agreed to freeze all discretionary spending for the balance of the year; any unspent money as of June 30 will be available to help make up the shortfall in next year’s budget. In addition, both boards are working on a list of items in next year’s budget that can be tentatively cut (effectively put in hold) in the event that we do not know how big the cut in state funding will be by the time the BOF settles on a final budget to send to referendum.
What happens next?
At its May 4 meeting, the BOF will get a projection of how much unspent money there will be from the current budget that it can use to cover next year’s shortfall. If the state budget is still unsettled, the BOF will then have to make its best guess about how large the cut in state funding to our schools will be ($800,000, $1.5 million, or some other number). If the amount of lapsed funding from this year’s budget does not cover the assumed state cut, the BOF will then have to determine how to come up with the balance. Options include making some tentative cuts in next year’s budget based on the recommendations from the BOS and BOF (these cuts can be thought of as tentative because if the final state cut is smaller than anticipated, the reductions in the town and school budgets can be reversed by special appropriations after the referendum is approved), allowing the mill rate to increase by more than 2.5%, and reallocating money from some of the reserves, including the $500,000 rainy day fund the BOF created.
What can voters do?
Over the next week or so, voters should tell the BOS and BOE which programs they believe should be protected against any cuts in next year’s budget. Voters should also let all three boards, especially the BOF, know how they want any shortfall in the budget caused by the state funding cut to be handled. Given the extraordinary increase in health insurance costs that next year’s budget has already absorbed, it is not likely that the budget could accommodate an additional cut of $1.5 million in state funding without some modest additional increase in the mill rate, perhaps an extra 0.5%. The alternative would almost certainly include some tentative cuts in the BOS and BOE budgets for next year. Madison is not as wealthy as the Fairfield County towns that the Governor lumped us with, but we are not overtaxed. To preserve the quality of life that brought many of us to this town and to protect our schools from cuts in an already lean budget, voters will need to advocate for a mill rate increase of around 3%.
Silence and complacency are not options. Voters, especially parents, need to make their voices heard by May 4, and they must then organize to help ensure that the town and school referenda pass on May 24.
Bennett Pudlin, Madison Board of Finance