Mayor Delivers Municipal Budget Plan

Ledyard Mayor Fred B. Allyn Jr. submitted a $19.8 million municipal budget proposal for 2011-12 Monday to members of the Town Council. The plan reflects an increase of $295,000 over the current budget, and calls for an increase in the tax rate of 2.25 mills – the first such increase in three years.

In a letter to council members, Allyn said the proposed increase is largely driven by a 6.6 percent decrease in the Grand List, the result of a recent townwide revaluation in the midst of a depressed real estate market. The Grand List of taxable property now stands at $1,091,877,538.

The town’s current tax rate is 25.65 mills.

Allyn said a 1.7-mill increase is necessary just to offset the effect of the Grand List decrease. Another 0.33-mill increase is directly attributable to the proposed $29.6 million school budget, and the remaining 0.22-mill hike is due to increases in General Government operations.

Those increases include a proposed 2 percent pay raise for town employers, something Allyn said is overdue. “We cannot continue to expect town workers to provide their services with no raises,” he wrote to the council.

The proposed budget includes close to $1 million for capital improvements. Much of this is needed for road repairs, Allyn said. “We’ve deferred and deferred and deferred, and at some point we can’t keep deferring.”

The budget includes funding for a new curbside collection contract, which would become effective on July 1, and the implementation of a single stream recycling agreement. It also provides for the addition of an assistant engineer to work with the town’s land use departments.

Allyn said the 6.6 percent decrease in the town’s Grand List does not necessarily mean that individual homeowners saw the assessed value of their homes drop by that amount. Homes in the $100,000 to $250,000 range tended to hold their value better than pricier homes.

“So there’s good news and bad news for the $250,000 and under segment,” Allyn said. “The bad news is that the effect of the mill rate increase will be more significant on the modest end of the real estate market.”

Allyn said his budget proposal accounts for the loss of nearly $300,000 in PILOT funds as a result of the state no longer reimbursing towns for tax credits given to companies on machinery and equipment.  It does not factor in potential gains from an array of “revenue tools” offered by the state.

These so-called tools include new taxes on hotel rooms, airplanes and boats. While Ledyard apparently doesn’t have any airplanes, it has a number of boats, plus Foxwoods-owned Two Trees Hotel, which is on town land.

The state is projecting that Ledyard could raise an additional $258,944 in tax revenue from its new tools, although Allyn said this remains to be seen.

The mayor pointed out that had the state not elected to discontinue its reimbursement of industrial tax credits, the 2011-12 budget proposal would be flat.

He credited the diligence of the Finance Department, especially Finance Director Marcia Hancock, with achieving what he called a “very conservative proposal.”

The plan will next be reviewed during an all-day budget workshop on Thursday.