The City Council set the tax rate Monday night. From Mayor Bill Finch:
City Mil Rate to Remain Stable at 39.64 mils
Mayor Finch forwards proposal to City Council for vote
The City’s mil rate for the 2010 Grand List has been submitted by Mayor Bill Finch to the City Council for immediate consideration at this evening’s Council meeting. The rate remains unchanged from last year at 39.64. “Easing the burden on our taxpayers is one of my administration’s top priorities,” said Mayor Bill Finch.
“We have done what no other municipality in the state has been able to do–reduce spending for three years in a row, lowering this year’s budget by $1.3 million,” said Mayor Finch. “While some neighboring communities have increased their budgets and may be raising their mil rates during these tough economic times, our prudent action, as well as the shared sacrifice of our labor unions has resulted in a flat mil rate with no tax increase for Bridgeport residents. The Council members and my administration have worked together to bring a fair budget to the table in order to ease the burden on our taxpayers.”
In a special session on May 9, the City Council approved the $491,876,896 budget. This amount includes the council adopted increase of $23,879,838, which includes education cost-sharing funding of a little over $22 million, plus $1,164,223 directed toward the City’s fund balance, that amount is equal to 10% of fiscal year 2010’s unrestricted fund balance which helps support the City’s Fund Balance Policy.
The City’s tax rate of 39.64 is equivalent to $39.64 in taxes per $1,000 of net assessed value. The City of Bridgeport sets the mil rate annually in May/June as part of the municipal budget process. The mil rate includes the voter mandated Library Tax of 1 mil, which is equivalent to $6,723,000. The 2010 Grand List is levied on property values as of Oct. 1, 2010. The first half taxes will be due on July 1, 2011.
The City Council finished their major financial duties for the year providing the Mayor with his election-year desire: no increase in taxes! Wonderful, isn’t it? Mil rate stays the same. And our Mayor claims “reduced spending three years in a row, something no other municipality in the State has been able to do.” What a bold misstatement as a financial manager. No other municipal executive with Pension and Other Post Employment Benefit obligations of One Billion Dollars would have made these claims while ignoring and denying reasonable payment streams today. This strategy increases the burden for next year and for many years thereafter.
Of course you don’t need to go to any Budget & Appropriation public hearings to learn about the City’s financial condition if you are on the Council. Just vote the way the Mayor wishes. And you certainly don’t need to review the Comprehensive Annual Financial Report of the City by outside auditors (with special attention to footnotes showing $900 Million of liabilities handled on a pay-as-you-go basis). Etc. etc. etc. … If you did any of those things you might get a headache. Golly, it’s complicated. And as a Council member you can’t ask questions, because those who ask serious questions are removed from the Budget and Appropriations Committee.
Restoring the Unrestricted Fund Balance in the manner in which the administration did it this year is slapping lipstick on the pig. Not a budget priority last year, but whatever is leftover gets put back. (When you have multimillions of vacant positions funded with benefits and you don’t fill the vacancies, think you have a little room to pay attention to meager City Fund Balance?)
Library Tax??? Is that what the referendum was about? Well that is what Mayor Finch thinks about it, obviously. My memory tells me that the voters approved a measure to dedicate 1 mil of City tax revenues each year to the expanded operation of Library services. (Part of the budget, not an added tax, where the Library had received approximately 6/10 of a mil in recent budgets.) The administration suffered a defeat when the voters favored the 1 mil revenue stream for the Library Board and cannot gracefully get over it so it mischaracterizes this funding while holding Library new employee hiring ransom with City red tape for over nine months!
“Easing the burden on the taxpayers” has meant not telling it like it is about our City long-term liabilities. The Mayor has provided a trickle of funding with State waivers for three years. But there are other strategic options, like cutting City vacant positions that would have provided dollars for additional Pension funding with no increase in taxes. Or perhaps the Mayor could have studied the refunding of City Pension Obligation Bonds, with an interest rate of 7.4%, to reduce that number at a time when corporate issues are hundreds of basis points less? Let’s see, the Pension actuaries have assumed 8% returns across the portfolio while we are paying 7.4% to borrow the money. Just since 2000 Mayor Finch, what is the average annual return to Pension Plan A over that time? Including the years in which Mayor Finch has told us of losses of $100 Million? There are some pleasant compliments floating around about the very recent handling of investments in Pension Plan A, but let’s look at how we got where we are (with no structural change in Trustee governance) through Ganim, Fabrizi and now Finch attentions and public sharing of bearing the burden? Bearing the burden, sharing the pain, are great phrases and necessary. But Finch, Sherwood, Norton and Stafstrom have put blinders on the Council and the public relations team will gear up to shout it out. Unfortunately, the financial mismanagement of which Pension Plan A is but one egregious example will not fit in the closet so the closet door stays closed. Stay tuned …