The East Haven Town Council approved the town’s 2011-12 budget and mill rate Tuesday over objections that it would result in more red ink.
The approved budget totals $85,275,670, which is about $800,000 higher than Mayor April Capone’s budget recommendation, but still about $395,000 less than the current fiscal year’s budget.
The new tax rate is 26.59 mills, a quarter-mill tax cut from the current 26.84 mill tax rate, though not as low as the 26.25 mill rate the mayor had proposed.
The budget passed by a nearly partisan 10-4 vote, with Democrats casting all 10 yes votes. The three Republicans on the council, Kenneth McKay, Richard Anania and Paul Carbo, and Democrat Vincent Appino cast the dissenting votes, and Gary DePalma, a police sergeant, abstained.
Republicans criticized the Democratic Party majority for what GOP Town Chairman Louis Crisci called a fiscal "shell game," carrying the town’s nagging budget deficit over into the next year but hiding it behind unrealistic budget projections.
The town finished the 2008-09 fiscal year with $2.785 million in red ink after revenues, especially tax receipts, fell far short of projections, according to Finance Director Thomas Thompson.
Three Republican Town Council members and two Republican mayoral candidates joined Crisci in calling for additional spending cuts.
But Democrats who supported the council’s budget defended it as fiscally responsible, and noted that they avoided slashing town services.
If Republicans wanted to cut town services, they should have specified what services they wanted to cut, said Councilman Vincent Camera.
Former mayor Joe Maturo scoffed at the small tax cut.
"Last year, East Haven taxpayers were saddled with a 17 percent tax increase to cover unnecessary spending," he said. "It created a cushion for the election year budget now being presented with the ruse of a tax decrease."
Maturo said the Democrats had used bonding to pay for capital budget items that should be in the operating budget, and their excessive bonding has given East Haven "the unflattering rank of the third most indebted community in the state."
Also weighing in was John Finkle of Angela Drive, a contender for the 2011 Republican mayoral candidacy, who urged the council to consider more spending cuts.
"I’m warning you this budget is another deficit budget," Finkle said.
Anania said he would vote against the budget because the council should have cut spending and increased the fund balance contribution to prepare for next year’s property assessment revaluation.
Conservatives warn that the revaluation would likely result in lower property assessments, which would require a high tax rate increase next year. They advocate building up the fund balance, also known as the "rainy day fund," to create a financial buffer to soften the shock to taxpayers.
The decision to increase the projected tax collection rate from 97.5 to 97.75 percent also came under attack as imprudent. The higher revenue projections allowed the council to increase the fund balance contribution without making other cuts.
Thompson, the finance director, explained an apparent inconsistency in the budget’s revenue projections in light of the tax collection rate change.
Normally, a mill rate cut of .25 would reduce tax revenue by $556,923, but his budget figures show an increase of about $10,000 in tax revenues.
Thompson said the reason is that last year he deducted $380,000 for tax litigation costs and $240,000 for property tax breaks for taxpayers who qualify as low-income, elderly or veterans.
He said the increase in the tax collection rate would produce another $150,000 in revenues to further offset the apparent shortfall.
