Middletown OKs Budget With 5-Mill Tax Increase

May 13--MIDDLETOWN -- The common council adopted a $143.1 million budget for the 2014-15 fiscal year Monday that increases spending about 4.4 percent.

The budget sets the school system's budget at $76.2 million, an increase of about 2.3 percent. The adopted budget increases the tax rate from 27.7 mills to 32.7 mills. About half of the tax rate increase is due to a decrease in the value of residential property in the recent revaluation, officials said.

The budget was approved by a 9-3 vote. Council Republicans David Bauer, Deborah Kleckowski and Sebastian Giuliano voted against the plan.

Council Democratic Majority Leader Thomas Serra said an increase in state funding and a cut in the worker's compensation line item allowed Democrats to trim $306,309 and 0.3 mills from the mayor's proposal.

This year's budget preparation was difficult because of increasing health insurance costs, debt payments on the senior center and the Mattabassett District regionalization project, and salary increases and pension costs, Serra said.

"Unfortunately, revaluation hit at the same time as all of this," Serra said.

He said of the 5-mill increase in the tax rate, 2.4 mills were needed to account for the loss in property values, and therefore a decrease in tax revenue.

"Although I'm not happy to see my taxes going up any more than anyone else, I think this is a responsible budget," said Councilman Gerald Daley.

Councilman James Streeto said he would have liked to see more money go to the school system, but keeping the tax rate as low as possible was a priority.

"We're aware this is a substantial tax increase hitting some people harder than others," Streeto said.

In addition to the $1.7 million increase to the school budget, the schools are expecting about $3 million in state funding and expect to save at least $800,000 by switching to a self-funded health insurance plan.

"They are sitting very well to educate our kids," Serra said.

Giuliano said he voted against the budget because he felt it relied too heavily on a contribution from the city's fund balance. He said the budget also seems to rely on appropriations from the general fund to pay for projects and purchases later in the fiscal year.

In a separate vote, the council approved an increase in the Middletown Fire Department budget to $10.07 million, an increase of about 5.8 percent. The city fire district's tax rate will increase from 6.1 mills to 7.5 mills.

Mayor Daniel Drew said the council's adopted 2014-15 budget will keep the city in good financial shape and continue the work that allowed it to receive an upgrade recently in its bond rating from Standard and Poor's.

Drew said the upgrade to AA+ comes as the federal government and states, including Connecticut and New Jersey, have seen their ratings downgraded. A higher bond rating can significantly lower interest rates on borrowing, he said.

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