Work of Fiction

By Nicholas Mercier | CPOA President at April 18, 2024 | 8:15 pm | Print

Proposed Budget Shows Impossible Increases

Over the past few months Mayor Tim O’Brien has been making some pretty big promises to the community. He has claimed that he would increase funding to education, control municipal spending, spur economic development, and even in the face of a 17 percent reduction in the grand list, he was going to hold the line on taxes. It is easy to understand why many people were skeptical that he would deliver on even a portion of these claims. Now the public finally has a chance to look at the Mayor’s proposed budget and begin to decipher how he hopes to achieve his lofty goals.

As I began to review the budget I noticed some alarming trends. The first thing I noticed was the Mayor’s revenue projections. The anticipated revenue from almost every license and permit seems to double, or even triple, in the Mayor’s budget. Revenues for marriage licenses, sports licenses, building permits, dog licenses, new business licenses, liquor permits, electrical permits, plumbing permits, zoning permits, fire permits, and health licenses are all expected to increase by 150-250 percent in the coming year. Perhaps the most baffling is the Mayor’s prediction that we will see a 475 percent increase in number of pistol permits next year, despite Connecticut just passing some of the most restrictive gun laws in the nation.

Perhaps these figures could be reasonably explained away; the Mayor isn’t going to raise taxes, but he plans on doubling almost any fee that is associated with living, working, or doing business in New Britain. But many of the fees he is suggesting will see a massive increase in revenue are set by the state. New Britain cannot arbitrarily increase the cost of a marriage license. So the only explanation is the Mayor either feels the State will be increasing all of these fees, or that twice as many people are going to be getting married in New Britain.

The permits and licenses are just one example of an unexplained revenue increase. In the next fiscal year the Mayor expects us to believe that the office of Vital Statistics, which previously has brought in around $220,000 will now be expected to almost double that, to $420,000. If that weren’t enough of a burden on the poor office of the Town Clerk, they also are expected to make more than 500 percent more under the line item of “Miscellaneous Revenue” which has increased from $6,600 to over $45,000.

If those figures didn’t cause you to begin to question the Mayor’s grasp on reality perhaps the next few will. In terms of parking tickets the Mayor expects there to a three-fold increase, from less that $300,000 to over $1 million. He further expect snow ban towing to net the city over $50,000 - despite the fact that this year, with the major battering of storms we faced we barely raised half of that.

In what could be described as brief moments of lucidity the Mayor has removed the line item for “Anti-Blight Poor Condition” which failed miserably to produce the $425,000 in revenue he projected for this year’s budget and the $10.5M in “Transition Revenue” which I have been questioning for months. But he is quickly back onto his streak of unrealistic optimism when his budget declares that he expects $50k to be raised from “Ordinance Violations” and a further $1.9M to be raised via the Police Call Hot Spot Fee, which to date has generated no funds for the city.

The list could go on for a great deal more, highlighting increase after increase in revenue projections that the Mayor has put forward without any explanation: the assumption that revenue from all garages and parking meters will more than double, that the Rock Cats will pay more than twice in rent than what was budgeted for in this fiscal year, that the interest from our trust funds in the Recreation Department will increase to half a million. What should disturb taxpayers is that these items are being presented with no explanation to the public. The Mayor seems to be hoping his headline that taxes will not go up will overshadow any serious discussion about how realistic his projections are.

The Mayor’s revenue projections also blindly ignore several sunsetting revenue sources. For example, the Mayor’s budget predicts that the Hospital Garage will bring in $800,000 next year, which is an increase of the past several years where it has brought in around $650,000. Yet his revenue projection completely ignores the fact as of December 31, 2023 we must hand over the garage back to the hospital. So he is expecting it to generate more revenue is half the time. Likewise the Mayor must have missed the memo that the Connecticut Department of Environmental Protection has mandated we close our landfill by December 2013. He is predicting that we will take in over two times the refuse from last year, again, in half the time. Frankly there isn’t room to put that much trash into our landfill, it is running out of air space, that is why we are closing it.

As if these potential issues were not concerning enough there are even larger problems within this budget. The Mayor has dangerously decided to list LoCIP funds as a revenue item within the general fund budget. Local Capital Improvement Project (LoCIP) funding comes from the state and is typically part of a special budget. That is because these funds may only be used on LoCIP projects, and to co-mingle the funds, even on paper, with general funds is a questionable accounting practice.

It also gives a distorted view in the budget, since the projects that the LoCIP funds are going to pay for are not listed in the general fund and may go on for several years. So in effect the Mayor is claiming that the city is going to get this large pile of cash ($3.2M), but he is not being honest in representing that the money must go to special projects not included in the general fund. In fact, Mayor O’Brien has yet to explain to the public where any of the LoCIP funds will be going and what projects he expects those monies to pay for.

By including these funds in his general budget Mayor O’Brien is risking creating a whole host of problems with the State, who supplies the funding. His decision to include the State money in the general fund will most certainly bring heightened scrutiny and State oversight. That is why other towns, and New Britain in the past, have always kept these funds separate.

There is also a looming question of transparency and accountability with this budget. Through the act of consolidation the Mayor’s office’s budget has been absorbed into the department of Economic Development. This makes it far more difficult to actually track the cost of the Mayor’s staff, most of whom are appointed. It also makes it difficult to see what the Mayor is spending his budget on and how much of the Economic Development budget is going to his offices.

Furthermore it is questionable whether his revenue projections could even be obtained considering his static staffing levels. For example, remember all of the additional fees the Town Clerk’s office is supposed to collect in terms of revenue? They have no increase in either full time salaries or overtime. Similarly, the Mayor is expecting parking revenues to more than double, but has allocated little to no additional manpower to the parking enforcement division. If he is planning on simply doubling parking fees and hoping that will generate twice the revenue he is ignoring the well known fact that the more you increase a fee the more people will work to avoid paying it.

He also has cut the overtime to almost every department by half. While it is applaudable that he is attempting to take a stance on employment costs, especially overtime, the question remains, is it realistic? What is troublesome is that, rather than treat each department as a separate entity, the Mayor has elected to cut spending by 50% across the board. Many of these cuts come from public safety departments, such as police and fire. Does the Mayor expect the fire chief or the chief of police to allow needed shifts to go unfilled because of his arbitrary budget decisions?

In addition to these arbitrary and unexplained cuts are new lines of revenue or new expenses that are equally mysterious. Mayor O’Brien was always a harsh critic of Mayor Stewart’s use of “Sale of Property” within the municipal budget, yet he is now posting almost half a million in revenue from the sale of an undisclosed property. Then there is the $1.75M that he claims we will receive for “Capital Improvement Design” and the $1.5M for the management of capital projects. Furthermore there is no explanation for the new “Community Development Office” that will cost the city $300,000.

So where does this budget leave us? Sadly not much better off than we started. Mayor O’Brien promised a budget that would not raise the net revenue from taxes, and that is what he delivered. Sadly it is a budget that is doomed to balance only on paper. You cannot triple fees, fines, and licenses and expect to be successful in collecting everything you projected. Not to mention that making such an increase in the costs of doing business in New Britain are not going to promote economic growth and vitality.

The unrealistic and indefensible revenue projections in this budget make the entire document a sham. If revenue projections had kept in line with department expectations the taxpayers would have been on the hook for a tax increase of roughly $20 million and would have amounted to roughly an 8 mill increase. That increase, along with the increase due to revaluation, would have raised the mill rate to around 52 mills. However, instead of being honest with himself and the tax payers of New Britain, the Mayor has decided to blindly ignore reality and tough decisions and peddle a budget that is built on deception. As a result the Mayor’s budget seems like it was designed to fulfill a hollow campaign promise rather than ensure a better future for New Britain.

Nicholas Mercier is the President of the Citizens Property Owners Association and former chairman of the Board of Finance.

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