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Mallozzi: 'Recipe for Disaster' Looms for New Canaan Taxpayers

With parents expected at a public hearing this week to call for more money for schools than finance officials have approved, the first selectman warns of what he calls "a perfect storm" for town taxpayers.

 

First Selectman Rob Mallozzi said the town must be very careful about how much it funds New Canaan public schools next year, as taxpayers already stand to face a steep rise for the fiscal year that follows.

Citing a proposed change to motor vehicle tax that could cost New Canaan more than $2 million in local taxes, as well as a state mandate to increase school funding each successive year, Mallozzi called the 2014-15 budget season “a recipe for disaster.”

“I’ve heard a lot about a perfect storm,” he told New Canaan Patch. “But I will tell you that the perfect storm coming that I see is not so much in this year, it’s in next year’s budget when we are faced with that major sea change in taxation and burden on top of the mandate to fund the school education for more or the loss of grants.”

The "major sea change" involves a shifting of taxpayer burden from homeowners with properties valued in the $4 million to $5 million range to a much larger group in the $1 million to $1.8 million range (see full comments in video).

Mallozzi's comments come as officials brace for an emotionally charged meeting Tuesday night, when residents will weigh in at a public hearing on Board of Finance's proposed budget for next year. The Board of Education has called for public support of its request to get the full, 5.7 percent year-over-year increase it needs to its operating budget (to about $78.8 million). The finance board in its proposal has reduced the district’s request by $2 million in operations (and $1 million to capital spending).

In presentations to the town, New Canaan Public Schools Superintendent Dr. Mary Kolek has referred to this year's budget cycle and monies needed for next academic year as “a perfect storm,” since many of the increases to operations are built into contracts with district employees. (See attached March 4 letter from the Board of Education to district parents.)

The public hearing Tuesday is scheduled for 7:30 p.m. at the New Canaan Nature Center.

Drama Mama March 11, 2013 at 01:39 PM
It is time for the BOE to come clean to the parents and taxpayers of the town. And it is time for EVERYONE on the TC and BOF to sharpen their pencils. The taxpayers should be able to look at a line item budget from the BOE.
Local Parent March 11, 2013 at 01:43 PM
Maybe we all need to understand the roles of all the Boards involved. These individuals are very dedicated and give up so much of their time, but who is looking at these decisions from all perspectives? There should be MORE dialogue...when a voice of contention is heard, it is seen as disrespectful but we need to weigh options here. We need more critical analysis of whatever is put in place at the schools new or old. Today my child left the house in tears - the wonderful, free-spirited weekend is now coming to a screeching halt as childhood is put on the shelf to go to the factory - CMT's, tests, projects, assessments galore...online, offline....how much more "excellent" do we need to be? Everyone should be asking questions and looking at the big, lifelong picture - what sticks with kids? What will our children remember 10, 15, 20 years from now - a teacher or a test? When natural curiosity and creativity is stamped into remission five days a week, what will be the outcome? Lets put out a survey to all the school families in town - ask for input.
heavens sake March 11, 2013 at 01:52 PM
The time has come for individuals, families, New Canaan , the State and the Nation to live within its means. The increasing deficit binge can not go on indefinitly which means reasonable spending increases reflecting demographics, spending restraint where possible (future sidewalks) and a fair tax system in an era of income disparity. Bob Mallozzi is demonstrating sound leadership and deserves our support .
Glen K Dunbar March 11, 2013 at 02:09 PM
I think it is time for the people to get what they pay for. they pay such high and unfair taxes. yet, what do they/we get for out money?? We need to (politely) stand out ground and not ask but politely DEMAND where our tax dollars go Education is important. New Canaan has to best schools in the USA from where I sit. This is at least ONE facet of this cold, cruel, swim on your own town that I respect and admire. BUT, to charge high taxes and then tell people they have to swim on their own is outrageous. People w/mental and physical disabilities need to be taken care of....NOT shunned as is done to "some".
what a life March 11, 2013 at 02:54 PM
I agree with the above comment made by "heavens sake". It is beyond time that we live within our budgets. It's also time to realize that throwing more money at a situation is not always the best way to solve problems. In an attempt to cut school expenses, I suggest that return to simpler times when parents and children took an active role in maintaining their schools, such as cleaning, yearly painting, yard work & snow removable. If there is a parent out there that has skills such as roof repair, window repair, etc., even better. Involvement in school property not only saves money but gives students and the community a greater pride in its dwelling and less vandalism too. What about school lunches? Do we really need a contract service? I suspect that there is only a small percentage living in New Canaan that can't bring a lunch from home and perhaps another family could pack extra lunches. Let's get back to basics! We're a varied community and our greatest wealth is what we could contribute if given the chance.
Roy A. Abramowitz March 11, 2013 at 03:11 PM
What concerns me is that I keep hearing from certain members of our legislative branch and BOF is that you can bond it, bond it, bond it. Interest rates are at an all time low. However you will have a day of reckoning. Understand this, basic finance 101. During the term of a bond the issuer does not amortize the bonds principal but only services the coupon (interest). So the yearly cost to the taxpayer is the cost of interest, which agreed is at an all-time low, However what happens in the future when the bond is due and the principal must be paid. Either you have the cash to pay off the principal or you must re-finance by issuing another indenture. Well in 10, 15, 20,25, 30 years I guarantee you that we will visit interest rates as high or higher than existed during the Carter administration. If I remember correctly 18% to 20% compared to today's near zero interest rates. Speak about a "Perfect Storm". It is simplistic mathematics to forsee what will happen to the town's mill rate what yearly interest servicing is at a rate exponentially higher than today. You cannot keep spending tomorrow's dollars today. If you persist you are welcoming the scenario that is present today in Greece and other euro-zone countries. The times of give me, buy me, show me must end or the financial future of our children in New Canaan looks rather bleak. Our children will be stuck with paying for our excessive spending today, tomorrow no matterhow well their education.
Angie S. March 11, 2013 at 03:59 PM
What I don't get is, with some of the sensible comments posted here, why does it seem like the actions taken on this year's budget only reflect the wishes of the Type A parents and the likes of Kolek who just want 100% of the increases Kolek was asking for from the town and its taxpayers? Surely there must be at least as many people in this town who recognize this impending problem as there are people clamoring for giving Kolek 100% of the increases she's asking for! Moreover, I don't understand why the BoE and Kolek can't just wait until the 2014-2015 budgeting to put in all the expensive additions to the budget. If increasing the budget for the BoE will make us have to increase that much more next budgeting cycle just to qualify for state funds, why not be more conservative and cautious THIS budget cycle to ensure we'd be able to sustain the increases needed next cycle in order to not be disqualified from state aid???
Baffled Resident March 11, 2013 at 04:20 PM
New Canaan "only" receives ~$1.5 million in ECS funds. In the grand scheme of things, that amount probably isn't enough to influence the decisions made by the BOE.
Paul M Potenza March 11, 2013 at 05:52 PM
Well said, Roy. Let's all do our part to buy vehicles worth less than $20,000, avoid vehicle taxes altogether, and force the Town to cut spending.
Glen K Dunbar March 11, 2013 at 06:42 PM
Mikey. I would go if I thought I would gain anything like a bail out. Because I would like to meet you. I like you pal. Wish I could be rich like you Your name sounds like money buddy. who is Dr Kolek? I wonder if He/She could write a "letter" for me
Baffled Resident March 11, 2013 at 07:26 PM
You've(inadvertently) given many people a good chuckle with this post. Thanks for the haha, Glen. On a very serious note Glen, i would suggest that you google that individual's name before you think about a meet-up.
Judge Crater March 11, 2013 at 08:51 PM
It would be wise for citizens to review how well the assessment revaluation meets industry standards. Patch has an informative posting from last week. If the tax burden is to shift to the lower-priced properties, people should understand why. The mysterious black box that generates property assessments needs explanation and a public seminar with television coverage on TV79 would be helpful. If this revaluation is not done correctly and transparently, some citizens will be visiting my judicial colleagues. http://newcanaan.patch.com/articles/eight-new-canaan-homeowners-appeal-assessments
J Bauer March 11, 2013 at 09:13 PM
First thing is first... Roy, well said about how our town officials approach spending and bonding. It's ludicrous. I had a very smart, well entrenched person in this town advocate taking on as much debt as possible now because rates were so low. Absolutely nutty that people do not consider the refinancing required at the end of these bond issues. The town already has too much debt. If rates go back to 5 or 6% (much less 10 or 18% as Roy mentions), we will be keenly aware of that fact. Second, a small matching state grant should not influence our decision making with respect to schools budgeting. The schools are over-funded in New Canaan. The truth of the matter is that parents and effort at home will more directly influence the success and quality of our students and schools than money will.
Judge Crater March 11, 2013 at 09:28 PM
Citizens should also know that the CT measures of assessment equity only apply to the town as a whole. If the assessment process breaks the town into different zones or strata, it is possible for significant assessment inequity to occur within those zones and the town will still pass the CT legal requirements. There are methods to highlight and remedy any such inequities. The Standard on Ratio Studies can be reviewed with an emphasis on uniformity. http://www.iaao.org/sitePages.cfm?Page=219 The standards can be complex and the citizens deserve an education, especially if the tax burden shifts to lower-priced properties.
heavens sake March 11, 2013 at 10:38 PM
Roy, Agree with you NC should not issue Bonds just because interest rates are low. Previous First Selectman preached taking on more debt for that reason, but Bob Mallozzi is more prudent . Many also believe inflation will make paying off debt with future cheaper $s will be easy. However , as you point out, any increase in interest rates to combat inflation would place many cities ,towns and individuals in default. We are in unchartered waters and therefore BOF should be more responsible and transparent before taking on increased spending. Our children will have a better chance to survive if we leave them a viable economy rather than huge debts with no chance to eliminate catastrophic debt at all levels of public financing. It is time for all to live within their means including NC
Local Parent March 11, 2013 at 11:01 PM
Let's look at what we DO spend money on so we aren't wasting it on programs that don't help kids. I think in your fear, you missed the message. Consultants at $800K? Really, what for? To develop more curriculum? Technology? Do we need more? Kids have plenty at home. If we really want to be cutting edge, get our kids off the computers and do some of "what a life" suggested in her post. "More" is not always "Better." And while your income may be limitless, or you plan to simply move on, mine isn't - I'll be here a while...and I'd like to consider the impact on our future. Things won't be getting better nationally for a while...and we all know what rolls downhill.
Michael Dinan (Editor) March 12, 2013 at 03:40 AM
Thanks everyone for your comments on this story. I'm closing this thread now. We'll have a fresh thread on this topic opening in the morning. -Mike

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