Hamden taxpayers are left in the dark
“A budget is a moral document.” This phrase is often heard during budget season from both sides of the aisle advocating for their personal values. The municipal operating budget is the cost of running a town which includes paying for employees, schools, and other services. Asking residents to pay property taxes requires a public trust.
While disagreeing on what to spend is as American as apple pie, we need to be honest about true costs and Hamden’s financial outlook. Additionally, the message a mayor delivers to a state board should not contradict the message delivered to constituents.
Residents of Hamden have been watching council meetings on Zoom since mid March, the typical time when mayors deliver their budget to the council. This year’s budget was delivered late, as permitted by Gov. Ned Lamont’s Executive Order 7I, resulting in a compressed budget season in an already difficult year for Hamden.
Our expenses were expected to rise dramatically, with our pension and debt payments increasing by a combined $8 million. After adding contractual wage increases, Mayor Curtis Leng presented a budget with an increase in expenses of $11 million. He increased the property tax revenue line by $5.5 million and added a fictitious revenue source of $5.1 million in COVID grants. Additional spending was covered by cost avoidance measures, including $7 million from debt restructuring. It quickly became clear that the main budget items to watch would be the COVID revenue, debt restructuring, and inevitable tax increase.
Members of our state legislative delegation were quoted in the New Haven Independent on April 17, 2020 as describing the $5.1 million COVID revenue source as speculative, aspirational, and imaginary. Nonetheless, a month after his first presentation to the Council, Mayor Leng proposed a budget amendment that increased the hypothetical COVID revenue to $7 million and held taxes flat for the year. Mayor Leng’s budget amendment was largely disregarded. The problem, however, persisted. The reduction in spending the Council would have had to make to overcome the outrageous revenue projections and cost avoidance lines, while competing with the mill rate the Mayor had proposed, was unachievable. Ultimately, the Council settled on a $6 million revenue assumption for COVID, which still remains an improbable revenue source.
Hamden’s debt service was set to increase again in Fiscal Year 2021 by $4 million, leading Mayor Leng to attempt more debt restructuring, repeating a scheme from two years ago. A $7 million cost avoidance would again extend the term of our debt. Shortly after the budget proposal, Hamden’s financial advisors, in disagreement with Mayor Leng, asked the council to fund the full debt servicing expense and save the debt restructuring for the next pressing issue, restoring the fund balance, which is expected to become negative after Fiscal Year 2020. The proposal is to fully fund the debt servicing and use the cost avoidance to create a surplus that will fund the fund balance, pending a balanced budget at the end of Fiscal Year 2021. This shifts our debt to the future with larger debt servicing payments.
Eliminating the cost avoidance of the debt restructuring forced the Council to make significant cuts and a steep mill rate increase during a global pandemic and economic crisis. Mayor Leng then took to Facebook to express his outrage, “I vetoed the Council Approved Budget yesterday because it eliminated important services our residents count on, such as community policing, bulk trash pick up and key education programs – while also raising taxes a lot.” The Council was forced to override the Mayor’s veto, raising our mill rate from 48.86 to 51.98. Hamden’s high mill rate and $2 billion in liabilities are not being solved by a mayor who puts more effort into appearances than fixing our problems.
In documents obtained through a Freedom of Information Act, the Municipal Finance Advisory Commission (MFAC) requested information on the financial status of Hamden. Mayor Leng has made two similar presentations to the Commission. In those presentations, Mayor Leng lauded the mill rate increase and cuts to services as solutions to our budget challenges, while messaging to constituents that the lost services and high mill rate are not what he proposed. Leng has now taken credit for the Council’s work that he fought at every turn. Commissioners at MFAC rightly asked about “the commitment on the part of the residents to fixing the fiscal problems of the Town.” Therein lies the problem. How can Hamden residents be willing to fix a problem that is not accurately described nor recognized publicly by the Mayor?
The December 9, 2020 presentation to the MFAC lists the debt restructure as one of the savings in expenditures to bring the FY21 budget into balance. The unrealistic COVID revenue assumption has killed the fund balance restoration plan. Ironically, the most honest aspect of Leng’s presentation is the image of an iceberg used in the background of his report, a Freudian slip that acknowledges 90% of Hamden’s financial troubles are hidden below the surface.
Lauren Garrett is Co-chair of the Hamden Democratic Town Committee Issues Committee.
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