Leng: Balancing Budgets, Stabilizing Taxes In ‘New Normal’

Written by Hamden Mayor Curt Balzano Leng

This year’s budget process has been a challenging one for many reasons. Primary among them is learning to live with the unfortunate “new normal” of reduced revenues from the State of CT, which forces a further over-reliance on the regressive property tax. State revenues have fallen sharply; with Hamden receiving $6+ million less than we received a mere year ago, and $11+ million less over our last two budgets.

This reduction is coupled with a mandated $6 million increase to our annual pension fund contributions. By itself, that swing in reduced revenue and required increased expenses totals $12 million before one dollar of spending for education, police, fire or any other department or service.

We have worked hard to develop a budget that maintains core services and continues to enhance public safety, and one option utilized in these efforts is a recommendation to restructure a portion of Hamden’s bonded debt – a very similar process to refinancing your mortgage for a slightly longer term. Hamden’s extended term would be about 6 1/2 years. This creates budget flexibility for the Town, while also incurring some additional cost over time. We approached this restructure very carefully, producing a plan which costs a fraction of similar debt restructuring plans that have been, or are being, implemented by municipalities facing the circumstances of the new CT landscape. (One CT community is currently completing a restructure (not one of the big cities) which will cost $65 million in additional cost. Hamden’s plan would cost a bit less than $18 million and we’re working to reduce that further).

I am pleased to report that the CT State Legislature recently approved legislation for Hamden which lengthened the period of time required to reach a full 100% for Hamden’s Town Pension Reform Actuarial Required Contribution (ARC). This action will help Hamden to eliminate what would have been a sure deficit in our existing budget (which closes June 30th and was hit with a $5 million mid-year cut from the State) and will reduce the overall size and cost of the aforementioned debt restructuring plan for the ongoing FY18-19 budget deliberations.

At the same time, the Town has also been actively working with our staff, union and non-union, to give back to help Hamden and maintain top-quality services. We have successfully negotiated 6 union agreements in the last 8 months, each of which contain meaningful pension reform and will save the Town tens of millions of dollars as part of our Pension Reform efforts. These changes and work with our unions on concessions to help balance the upcoming budgets will provide significant cost savings and allow Hamden to properly fund our medical and pension obligations without massively overtaxing our residents.

Finally, we’ve asked our large community stakeholders to come forward and help us with financial assistance. Quinnipiac University answered the call, committing to approximately an additional $1 million of contributions to off-set expenses from services enjoyed by the University in 2019. I’d like to thank them for coming to the table as a community partner.

The combination of these efforts, along with many more revenue creating and cost-cutting efforts, allow our community the chance to continue to strengthen our Town, our finances, and our long-term viability – without over taxing our residents further and without destroying the services that we count on and which make Hamden a special community.

Building a stronger Hamden, together.

-Mayor Curt Balzano Leng.