[Todd Lavieri is chair of the Board of Finance.]
Once again, working collaboratively with each department, we met the primary financial goals we established at the beginning of our budget review. Working with the Board of Selectmen’s proposed budget of July 2026 – June 2027, we reduced the amount raised by taxation by $3.0 million, we cut capital expenses by $4.0 million, and we reduced the taxpayer-supported capital (not bonded), by $1.2 million. That helped us push the Town-wide expense increase down to 2.3%. The amount raised by taxation is currently projected to increase 3.4% to cover increased expenses and a decrease in non-taxation revenues. The Board of Education budget increased 3% year over year. Town operating expenses excluding the Board of Education are up 1.2%. Non-property tax revenues are budgeted to decrease by 10%, or approximately $1 million. Currently the mill rate is budgeted to increase 2.6% to 17.12. The final mill rate will be set in June once the Board of Finance receives the budget back from the Town Council.
We believe these key metrics, especially the increases in the amount raised by taxation, mill rate, and overall town expenses will compare favorably with other towns, while maintaining our leading school district, our town assets, town infrastructure, and town operations.
Overall, the departments did a very good job, with many coming in with increases below our guidelines. As we have discussed over the past few years, our town financials remain in very good shape. Our top priority continues to be maintaining the top school district in the State of Connecticut that we have built. A high quality, high performing school district has been a focus for this town for many years. Our pensions remain funded, ensuring that the ‘can is not kicked’ down the road penalizing current and future residents and taxpayers. We have a AAA rating by Moody’s.
Points of Clarification
A few items came up this year during our month-long review. The amount raised by taxation is the amount we need to collect from taxpayers and property owners. That’s the amount that makes up everyone’s property tax bill. We of course budget for other revenues, but the largest amount by far is the amount raised from property taxes. People often ask about the grand list and the mill rate. The grand list can go up and the mill rate can go down. But regardless of the direction of the grand list or mill rate, we still need to raise $169 million from taxpayers.
Schools
On the cost side, the Board of Education budget now represents 67% of the total budget. It is vitally important that we work together with the Superintendent and his team to understand the school’s needs. As I am sure everyone knows, but maybe you don’t, your town’s Board of Finance has diligently spent two decades building a leading school district with the school superintendent and administration. The Board of Finance is not a passive participant. We have the dual responsibility of maintaining a leading school district with also providing financial guardrails and guidance for the taxpayers. We believe it is an important responsibility to provide a great education for our children. It is also important for maintaining residential home values, while keeping our town a great place to live. Expanding on that, we work with everyone in town to build and maintain this great town – the roads, the facilities, the fields, fire and safety, the parks, and our downtown, while trying to keep the cost of doing so fully transparent and as reasonable as possible.
Our process has worked. We have a top school district, which is our goal, while keeping the tax increases near or lower than other towns. This context is important for people in town to be reminded of. We aren’t going to do something to compromise the greatness that we have worked so hard to build together.
Politics Aside
In New Canaan, the budget isn’t about Republicans and Democrats, old versus young, new versus long-time residents. Those aren’t divisions that this board drives. Your Board of Finance is an experienced, nonpartisan board that represents the taxpayers and the best interests of the town. We don’t grandstand, or try to score political points at the expense of others.
Every year we ask the school district administration to reduce 1-2% of their budget request. And every year they do reduce their request. There is nothing we are doing or asking that is unprecedented or new this year. In fact, over the past five years we have asked for $6 to 7 million and we have gotten back that much or more. We work very well together to provide a leading school district with financial guard rails.
Resolving a Process Problem
One difference this year is we discovered a discrepancy with the accounting of staff headcount. Nothing unethical or fraudulent in our opinion, and contrary to comments that have been made. Just a transparency and process problem that has now been addressed. We may debate 1-2% each year. But we are not questioning the integrity of our superintendent or the Board of Education. What we discovered, however, puts a bright light on an issue with lump-sum funding. Each year, after the budget is finalized by the Town Council, we take a lump sum amount and assign it to the school budget. That is the State law.
It is important to remind people, the Board of Finance, by law, does not determine where and how the lump sum is spent or where funds are directed. We don’t choose to fund things or un-fund things. That’s not how it works. If programs are added or cut, the school administration does that. Not the Board of Finance. From time to time, residents who may be new or misinformed aren’t aware of these things and inaccurate information is put forth in emails, websites, and social media. It’s a pity that this misinformation gets so widely spread but that’s the world we deal with. Our public process focuses on facts.
Two things about a lump sum. One, it needs to accommodate variability. As we have said many times, with approximately 3,960 students, 5 schools, and 800 staff, the superintendent needs some flexibility. We fully appreciate that need and have been very understanding and supportive of this over the years.
The second aspect of a lump sum is that it is given with full trust. And, we assume, full transparency. In the fiscal year that ended in June 2021, we had 752 staff and 4,176 students in the k-12 student enrollment. In this budget we have a request for 803 staff, for 3953 students; that is 51 more staff for 223 fewer students. We approved six budgets that requested a total of 21 more staff. The problem is that the school district added 51 not 21. That added an estimated $2.5 million in salary costs alone in this budget – over $10 million of taxpayer money over the period, with additional healthcare costs each year for staff that we never explicitly voted on or approved or were even aware of. We were all quite shocked. We are not sure why an audit wouldn’t capture the discrepancies between what was approved each year and what the actual ending headcount number was.
When we found out that the expense didn’t square with the request, we hit pause to better understand. That’s our job. The process for tracking actual to actual, and budget to actual, was in need of repair.
The reason to explain all this is to help everyone understand why we had to spend so much time on this Board of Education budget. Having said that we will have a tighter reporting process tracking these headcount changes going forward. The savings the Superintendent finds every year obviously doesn’t touch the classrooms as evidenced by the significant increase in staff.
Summary
Our job is to ask every department the tough questions to ensure that the money we ask our taxpayers for is not spent recklessly. We do the best we can to support and defend all the constituencies. This town and Board of Finance are, and have been for many years, committed to a great public school system. But with 2-3% decrease in the student population, a 4-5% increase in staff, and a 15% increase in the Board of Education budget over the recent period that now exceeds $120 million, it’s our responsibility to ask why. This Board of Finance and members before have earned the trust, given the fantastic product that we have all created for our children, your children, and future families.
One final comment regarding the Saxe communication system request for $1.2 million. This expense was pushed out because of the possible impact to Saxe as the administration considers accommodating student enrollment increases. The point being we don’t want to spend the money twice – once now, and again, if and when, Saxe has construction and reconfiguration in the near future to meet growing headcount.
In summary we strive as a Board and as a town to deliver value and results for every dollar we collect and manage.