Tuesday, April 24, 2012

An Unsustainable Path.

It is budget time again in our city, and like the rest of the municipalities in the State of Connecticut, Danbury is busy putting in place it's spending plan for the 2012-13 fiscal year.

This year the process has been particularly difficult for a variety of different reasons, revenue is way off, foreclosures are up, and city expenses continue to escalate.

All of these challenges are not unique to Danbury, you can find them in most cities and towns in Connecticut. In municipalities across the state the education budget is the largest portion of the overall budget and is the one area of local budgets that continues to grow even while in many places school enrollment shrinks.

The assumption when preparing a municipal budget is that the education budget always goes up.

In Danbury, our Board of Education has asked for an increase of a little more than 5 million dollars. That's 5 million more dollars next year then they received last year.

To put that in perspective, to generate an additional 5 million dollars for the school budget, you would need approximately $300,000,000 of new construction/grand list growth within the city. Consider that in our best year (2007) we only issued $187,000,000 in building permits, the chances of the city ever being able to meet that type of request from the Board of Education from an increase in economic activity is slim and none.

The only alternative then for the City Council to meet the request of the Board of Education, would be to raise the $5,000,000,000 through an increase in property taxes.  An increase of that size would require a tax increase of almost 10%. The average home that pays $4500.00 in property taxes would have their taxes increased to almost $5000.00.

That's just for next year. On average the Board of Education requests a 5% increase to their operating budget every year.

Each year as the budget increases, even if the percentage of new money requested stays the same (5%) the amount of new money requested grows exponentially. For example, in 2005 the education budget in Danbury was $94,932,481. In that year, a 5% increase to the education budget would mean an additional $4,700,000. In 2011 the education budget is $114,895,291. A 5% increase to the education budget means $5,700,000 - an additional million dollars!

Then there is the explosive growth of the education budget. During the same time period (05' to 11') the education budget in Danbury has increased by $19,962,810.

So what drives the increase in expenditures? A variety of factors, enrollment, fixed costs, and increases in energy costs.

The largest expense in the budget is people, salaries and benefits continue to increase year over year. Finally, state and federal mandates require more and more programming that must be funded.

State education funding has not been increased in years and the City of Danbury lags far behind similar sized communities in terms of state education aid.

Regardless of how we got here, the reality is that Danbury and communities across the state have hit the wall. Taxpayers are losing their homes and can't afford large increases in their property taxes. The City of Danbury only has 44 square miles to develop - tough in a roaring economy, impossible in an anemic one.

For those reasons Danbury, and most communities in the State of Connecticut are on an unsustainable path when it comes to school funding.

Reform? Let's start with the school finance system in Connecticut first.

That's what needs reforming..

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