04/07/2025
April 6, 2025 – Issue 25.099
BOARD OF FINANCE RECOMMENDS TAX INCREASE OF 7.56%
At its April 2, 2025, meeting, the Board of Finance unanimously approved recommending a 7.56% tax increase for voter approval. The increase is the highest in the past decade, driven by a large increase in medical insurance costs and decreased availability of bond premium to offset debt service for school construction. Tactics used by the Board of Finance last year to keep the tax increase under 5% -- underfunding the medical reserve and using $1 million in bond premium – play a large role in this year’s increase.
Year % Increase
24/25 4.64%
23/24 6.78%
22/23 3.11%
21/22 2.98%
20/21* 0.99%
19/20 1.05%
18/19 2.55%
17/18 3.97%
16/17 0.53%
* - Revaluation Year
At the March meeting, a panel of Deputy Town Treasurer Ed Sbordone, BoE Business Director Carrie DePuy and First Selectman Melissa Lindsey assisted BoF members in crunching the numbers following last month’s resignation of Finance Director Vladimir Kan. Sbordone reviewed the current state of play on the budget. Sbordone played the same role in the April 2nd meeting, providing information on behalf of the Finance Department.
The April 2nd approval broke no new ground but ratified the discussion and direction from the BoF’s meeting on March 26. Much of the discussion at the March 26th meeting centered around suggestions by former BoF Chair Wes Marsh that brought the proposed budget down from a 10.38% increase (See New Fairfield News, March 24, 2025) to the 7.56% increase approved at the April 2nd meeting.
The recommendation by the Republican-controlled BoF for a 7.56% increase came after review of all elements of the Town budget: medical insurance, requests from the Board of Selectmen and Board of Education, debt service, and nontaxpayer revenue.
MEDICAL INSURANCE. Insurance Consultant Tom Kowalchik provided a new estimated cost of $8,364,552 for renewal based on February claim numbers, a decrease of $604,318 from last month’s estimate. This is an increase of approximately a 21% increase from this year’s cost and contributes slightly more than 2 points of the proposed 7.56% increase. It reflects large spikes in usage in a few months this year. Individual claims make up 90% of the costs for Anthem coverage, with fees for stop loss coverage and administrative fees taking up 10-12%. Kowalchik advised not going lower because the medical reserve is very low - “almost nonexistent.” Last year, against Kowalchik’s advice, the Board of Finance cut the medical reserve by $350,000 to take half a point off taxes, limiting options for this year.
BOARD OF SELECTMEN BUDGET. At their April 2nd, meeting the Board made no changes to their recommendations for the BoS budget from the March 26th meeting, where they discussed salary increases for elected officials, especially the Town officials most impacted by the increase in responsibilities due to early voting. At the March meeting, the BoF added $1038 to the First Selectman’s salary and $20,000 to the salary for the Finance Director to aid in the search for a new Finance Director. They also cut $25,000 from the Materials and Supplies budget. The proposed $14,814,751 for municipal expenses, which includes the medical increase, represents a 4.86% increase over this year. The Board left intact taxpayer funding of $74,813 for capital and nonrecurring projects.
BOARD OF EDUCATION BUDGET. The BoF moved forward with their recommendation from the March 26th meeting, where they cut $80,000 from general supplies from the operating budget and $225,000 from the capital budget, postponing replacement of the HVAC system for the pool area. This results in a budget of $59,153,707 for education expenditures, which includes medical expense increase of $1.25 million, representing a 7.02% increase. The capital budget sits at $510,000 to take out the underground tank and fund addition of classrooms in the Middle School. BoF Chair Thora Perkins expressed her opinion that the BoE budget was “a good budget,” in contrast to the past years where she pushed hard for cuts to the operating budget.
DEBT SERVICE. Although the total amount due to pay off debt service for school construction has started to come down, the amount of taxpayer funding will increase this year. Last year, the Board of Finance used $1 million of remaining bond premium to offset debt service in order to keep last year’s tax increase below 5%. This left only $190,000 for this year, requiring an increased payment of $423,681, a 6.13% increase over last year.
NONTAXPAYER REVENUE. The Town receives revenue from a number of sources, such as grants from the State, real estate conveyance fees, and permit fees. In the March 26th meeting the BoF added $462,500 to revenue estimates from these sources, helping to bring the proposed tax increase down about 2/3 of a point. The BoF agreed to add $143,000 in permit fee revenue, $4,000 from senior center programs, and $275,000 in state grants for education. The State has notified New Fairfield that they are planning to cut $450,000 in education funding because of the increased wealth index for the town. Several town officials are working with the state delegation to restore that funding and have moved ahead with an assumption that at least some of it will be restored.
While acknowledging that they can be confusing, the Board also agreed to include advisory questions about whether the proposals are too high or too low, consistent with the requirements of State law.
The tone and pace of this year’s budget deliberations were very different from last year. Meetings of the Board of Finance in 2024 were confrontational, with several Board of Finance members (who are still on the Board) insisting on large cuts to BoE funding. Some meetings stretched past midnight, and it took a historic five referendums before voters were satisfied that a proposed budget did not cut too much out of educational funding. Apparently recognizing the strength of support for the schools, the Board cut very little from the BoE proposed budget this year. If, however, this proposed budget fails, there will be no other options but to cut the education budget, as pointed out by Alternate Board member John Arizzi at the April meeting, since there is no room for cuts in the town-side budget.
The next step is for the Board of Selectmen to hold a Town Meeting to schedule a referendum. A Special BoS meeting, to be held remotely, is scheduled for Monday April 7 to approve a Warning to hold the Town Meeting on Wednesday, April 16 to approve the date of the referendum. With this timing, a referendum could be held as soon as Saturday, April 26.
The Board of Finance meetings can be viewed here: https://vimeopro.com/user53774442/town-of-new-fairfield-board-of-finance.
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