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East Hampton Budget: Compared to What?

The process of adopting a local budget for the coming fiscal year took a giant step this week as the East Hampton Board of Education adopted their $26.61 million education budget. The budget process is, as always, an important discussion because it impacts everyone as taxpayers and as consumers of town services.

It is a task made more challenging because when people make most decisions about how to spend their money, they compare the potential purchases. But when deciding what to buy as a community, the only good frame of reference is what was spent last year. Thus, spending more becomes a proxy for improving services and spending less becomes a stand-in for holding the line on taxes with plenty of room left for subjective judgments in between.

Though imperfect because each town faces slightly different situations and chooses to handle them in a plethora of ways, it remains helpful to make some historical comparisons for context. According to the Connecticut Department of Economic and Community Development, there are a handful of towns with about the same population as East Hampton’s estimated 12,685 residents: Coventry (12,207 residents), Oxford (12,734), and Windsor Locks (12,495) each have their Fiscal Year 2010-2011 budgets available electronically for comparison.

Here is how the four towns’ budgets match up.

As total budgets, the four towns were quite similar. East Hampton’s $38 million budget was slightly higher than Coventry’s $36.2 million, slightly lower than Windsor Lock’s $43.1 million, and about the same as the Oxford budget at $38.6 million.

The Board of Education budgets are the single largest line item in each town’s budget, comprising 68% of the total budget in East Hampton and Coventry, 66% of the budget in Oxford, and 63% in Windsor Locks. Education spending on a per resident basis was much the same. For all the rhetoric about local control of schools, virtually identical education budgets and per resident spending on education figures suggest that either everyone does it same way on accident or because it is mostly mandated from Washington or Hartford.

As long as we believe that Washington and Hartford always do things the best way possible, we are in good shape.

Public safety spending has been a contentious issue, to say the least, in East Hampton. In comparison to the similar towns, though, this line item is in the middle of the pack at $157.96 per resident. Oxford spent $138.73 per person while Windsor Locks spent more than double at $329.24, likely due to the residual effects of having Connecticut’s largest airport within its borders. 10% of the Windsor Locks’ total budget went to public safety compared to just 6% in East Hampton.

East Hampton budgeted $941,080 for culture and recreation programming in FY2010-2011, a sum twice that of Coventry’s $466,986 and Oxford’s $435,014. Windsor Locks, on the other hand, spent $788,922. This was the only major category in which East Hampton spent the most of the comparison towns.

After a punishing winter and the promise of a very busy spring of patching potholes, public works budgets are a challenge in every Connecticut town. As a spending matter, however, the line items are all in line at about 5% of each budget.

The most encouraging comparison for East Hampton comes on the debt service line. Without the exercise of proper caution, this expenditure can easily come to consume government budgets. At the state level for example, Connecticut spends more on debt service each month than it spends annually on the Department of Environmental Protection. East Hampton, on the other hand, spent only about 4% of its total budget on debt service payments compared to 8% in Coventry and Oxford and 6% in Windsor Locks, saving taxpayers more than a half a million dollars compared to those in other communities.

The problem with comparing municipal budgets is that each town is so different and is engaged by widely different circumstances and factors that virtually every comparison can be dismissed as flawed. With this caution in mind, though, such an analysis can give context to the budget discussions ahead and offers more than just what was spent last year.

Little New in Malloy Budget for East Hampton

Governor Dannel P. Malloy unveiled his plan to close the state’s $3.2 billion deficit this week to half-hearted praise and widespread grumbling. The plan relies on $1.5 billion in tax increases, $1 billion in salary concessions from state employees, and $750 million in spending reductions.

Amid the spending cuts and big tax hikes, one surprising initiative was new money for municipalities. Funded by a 0.1% increase in the sales tax and returned to the town of origin in an effort to diversify the revenue base of municipalities, the effort will redirect $85 million in new money to towns over the next year.

Towns with significant retail outlets like Manchester or Danbury will see a big influx of new money from the state. East Hampton’s estimated $212,219 in new revenue will have a modest impact on the town’s $38 million budget, or a .005% increase.

Other state aid coming into town will remain similar to last year. The state’s Payments-in-Lieu-of-Taxes (PILOT) for state-owned property are proposed to be reduced by $4,578 from $117,342 to $112,764, East Hampton’s share of state casino revenues is being reduced from $58,496 to $57,413, and aid for public school pupil transportation is being cut by 4%.

Looming on the horizon is the prospect of a new Education Cost Sharing formula, which Mr. Malloy promised for next year. ECS brought $7.1 million last year, or 27% of the total local education budget. Significant changes to the formula could bring more state aid into East Hampton, but it also could bring in less.

Like every town in the state, East Hampton faces a challenging budget environment locally and it is a welcome change for the state not to balance their budget by shifting burdens to the property tax payer at the local level. But that same property tax payer will pay significantly more in taxes and confront the same $1.5 billion brake on economic development, despite the rhetoric about Connecticut being “open for business”.

The likelihood of tax hikes also presents a challenge for local elected officials. With much more money flowing to Hartford, and some trickling out, property tax hikes would be incredibly challenging for Connecticut residents struggling to make ends meet.

This piece was originally published by East Hampton Patch on February 22, 2011

Does Commuter Rail Have a Future in East Hampton?

The Roads of East HamptonThe winter weather has wrecked havoc on East Hampton’s commuters over the past several weeks, turning journeys usually measured in minutes into hours-long treks on overcrowded highways. Those hoping for warmer weather to cure their ills have the coming rehabilitation work on the Arrigoni Bridge, rising gas prices and the normal summer driving season to look forward to.

Amid these road hazards, people can’t be faulted for considering alternatives to get them where they want to go. Given its proud history in the area and its apparent success in other places, rail is one option that always seems to score a great deal of attention.

President Barack Obama featured one type of rail service, high-speed intercity, in his State of the Union address on Jan. 25, 2011, saying that, “This could allow you to go places in half the time it takes to travel by car. For some trips, it will be faster than flying – without the pat-down.” High-speed rail already benefitted immensely as part of the President’s 2009 Stimulus package that shepherded $8 billion to such projects around the country.

The Republican takeover of the U.S. House of Representatives seemed to imperil this portion of the Obama vision, given the heavy and ongoing commitment of tax dollars required to make rail a reality. But the Chairman of the key subcommittee on railroads, U.S. Rep. Bill Shuster from Pennsylvania, authored an opinion-editorial piece for The Hartford Courant last weekend, which singled out the New Haven-Hartford-Springfield line as a key route for investment.

These developments would seem most fortuitous for those dreaming of bringing rail transportation to East Hampton and Portland. A successful New Haven-Hartford-Springfield route would almost surely serve as an impetus to couple commuter rail with it.

A closer look at current commuting trends complicates the issue. According to the Connecticut Economic Resource Center (CERC), about half of all commuters from East Hampton or Portland are travelling to either Hartford or Middletown. Leaving aside debates about how many workers from East Hampton would really be willing to drive or walk to a train station, park, get on the train, ride it to Middletown, and then walk or take the bus to their workplace, it remains true that a commuter rail system between those points would not even be a practical option for the majority of commuters.

Given the decentralized geographic organization of our work, it seems farfetched that rail might have a future in the area. It is more likely that it would serve as a costly boondoggle instead of a solution to the problem.

Commuters hoping for some relief from the gridlock should not lose heart though, because the data also suggests a better alternative. Of the people that commute to East Hampton, 69 percent of them live in East Hampton and 46 percent of people commuting to work in Portland live in Portland. Growing the local economy with jobs and economic activity will be far better at solving our transportation problems than any other project we could conceive.

This article originally appeared in the East Hampton-Portland Patch on Monday, February 7, 2011.

East Hampton Noise Ordinance Poses Pitfalls

Hog Hill, East HamptonOn his radio program this week, one caller asked former Governor John Rowland if he had any interest in running for the U.S. Senate seat being vacated by Sen. Joe Lieberman. Obviously bemused by the question, Rowland chuckled as he noted that the Senate was where “good politicians go to die,” and that if you wanted to really make a difference in government, getting involved at the local level had far more impact than the federal House of Lords.

Local officials in East Hampton once again learned the true measure of those words recently as they returned to the sticky issue of noise regulation. Prompted by complaints about the volume of music emanating from Angelico’s Lake House and the potential for future issues with noise, the Town Council has been investigating the issue in search of a solution that placates the affected homeowners near Angelico’s while setting good precedent for the future.

At the Town Council meeting on January 11, 2011, Councilor Sue Weintraub noted that the City of Hartford implemented a 100ft. Rule that prohibits sound that can be heard 100 feet from the source. According to the City’s website, the easy-to-enforce new ordinance increased the number of tickets written by 1050%. The Council also discussed the ideas of regulating outdoor amplified sound and citing bands with noise violations in the event that live entertainment is creating the disruption.

Many other communities limit the hours that sound can be emitted, usually with one set of rules for weekdays and another for the weekends. In New York State, the legislature last year considered a bill that would start enforcement actions against establishments that were the subject of six noise violations in any six month period.

It stands as a challenging situation to address. The rights of fellow property owners are infringed by noise pollution. But at the same time, taking an action that would have an adverse impact on a business would be counterproductive. Being recognized as a community that is friendly to businesses is a competitive advantage that East Hampton should seek, especially in the current difficult economic times.

Balancing the two will require that the Town Council to be thoughtful and collaborative with the varied interests involved. In finding a resolution, though, it will prove once again that local government is where all the governing that really matters to people actually happens.

What Will Malloy Mean for East Hampton?

DSC_0169Dannel P. Malloy took the oath of office this week to become Connecticut’s 88th Governor, and the first Democratic Governor since East Hampton’s own Gov. Bill O’Neill held the post from 1980 to 1990. But with big changes in the Land of Steady Habits, many are curious as to what the former Mayor of Stamford might mean for towns now that he is in charge.

With state officials are struggling to balance a gargantuan $3.4 billion budget deficit, the more than $2.8 billion in town aid might be an appealing budgetary target. Officials at the Connecticut Conference of Municipalities, for example, have expressed “guarded optimism” about the prospects for avoiding cuts in state funds that go to towns.

But other states, like New York, Virginia, and California, have already made significant cuts in K-12 education funding. In East Hampton, Education Cost Sharing grants from the state (and federal government this year with the Stimulus) brought in more than $8 million in revenue for education, comprising approximately 32% of the total education budget and 21% of the town’s overall budget. Reductions in these funds would leave town officials struggling with their own budget crisis.

Allowing municipalities to keep a portion of the sales tax collected locally was an idea suggested by Republican gubernatorial candidate Tom Foley during the 2010 campaign and has been popular among some of Mr. Malloy’s former colleagues, such as New Haven Mayor John DeStefano. Such proposals would give East Hampton the opportunity to diversify its revenue base and be less dependent on state funds. Governor Malloy’s budget chief, Ben Barnes, has expressed an interest in such a proposal but again, with such a huge budget problem at the state level there may not be a great deal of interest in sharing resources with anyone.

The potential implementation of a statewide property tax is another suggested budget solution that would have a major impact on local residents. A bill to enact just such a system was proposed during the previous legislative session and the idea could find new legs in the current one. Property tax revenue is the single largest source of revenue for East Hampton, raising $28 million of the $38 million needed for the town budget. Adding additional weight on top of the local property tax burden would be counterproductive to the hard work that local leaders do each year to hold the line on taxes.

It remains to be seen what the new Governor will mean for East Hampton. Governor Malloy’s approach in dealing with the budget will be the first big test and a key indicator of what the next four years are likely to look like for local residents.

This article was originally published by East Hampton-Portland, CT Patch on Sunday, January 9, 2011.