Officials: Health insurance drove $4.5M budget deficit

Health insurance overages drove what ended up being a more than $4.5 million deficit in Shelton's 2022-23 fiscal year budget.

The Board of Aldermen, at its meeting Thursday, voted to use money from the general fund surplus to cover the deficit. Most of the shortfall, about $4.1 million between the school system and city, was due to health insurance costs. Of the remainder, about $300,000 was due to special education costs from the school system.

Mayor Mark Lauretti said the schools-related costs were "no surprise." He praised the school district's recent personnel changes, which included consolidating the special education department under Tracy Hussey and hiring a new finance director.

On the city side, health insurance costs ran a $1.4 million deficit. Lauretti said he hoped the city would be able to make changes to remedy the health care costs.

"In my 32 years (in office), I have never experienced anything like this before," Lauretti said about what has become annual deficits in the health insurance accounts.

City Finance Director Paul Hiller said the city has been working closely with its broker/advisor and its provider, CIGNA.

"The inflationary pressures of healthcare have exceeded any other budgetary account or item," Hiller said. "It is a major concern for the city."

Some inflationary pressures have been passed on to certain employee bargaining units due to contractual language, Hiller said.

"That does not apply to all groups, as a result of their current contracts," Hiller said. "The Board of Education is dealing with similar issues for healthcare as their budgetary overage was predominantly caused by healthcare."

The city-run bus company also had a deficit of some $237,000, which Lauretti attributed to unforeseen maintenance costs. Lauretti told the aldermen the buses are an older fleet, but "it is cheaper to put the money in to keep these buses running longer as opposed to purchasing new buses."