Comments on the budget

The tough thing about this budget is that property taxes are likely to
rise no matter what. This can be attributed to three things: decreased
revenue, decreased reliance on the fund balance ("rainy day fund") for
revenue, and contractual increases in personnel primarily (but not
exclusively) in the BOE budget.

Decreased revenue: Building permits and local revenues are down in
this economy. However, the budget as published only predicts an $88K
shortfall in revenue from last year.

The fund balance: This was addressed in a letter to the BOF prior to
the meeting last week (please let me know if you want a copy). To
summarize, since ~2004 we have drawn the savings account of the town
down from a high of over $7M ~$1M dollars per year so that it is now
between $2-3M. The big issue is that this draw down was listed as
$1.2M in REVENUE last year (if you draw $5K out of savings do you
report it to the IRS as revenue?). Because the fund balance is now so
low, we can not only not draw on it when we should be able to (in a
poor economy), but are faced with the tax increase that is a result of
relying on the fund balance to keep taxes lower relative to our
spending over the last five years.

BOE budget and salaries: You will hear that the town should have
approached the unions for wage concessions prior to going to
referendum. Some seem to think that we could have just negotiated with
the teachers to open their contracts and this would solve the budget
issues without cutting staffing. Not true. Wage concessions on the
teacher side are NOT a good short or long term solution for two big
reasons reasons:

1) The teachers unions are NOT going to just open up their contracts
and forfeit their raises without staff and program cuts (before or
after a referendum). The CT teachers union has specifically directed
local unions to not open up their contracts. And while I do believe
that wage concessions will occur in certain towns it will be news and
has not to my knowledge occurred yet in CT. While we won't know until
and if we get there having talked to some teachers I suspect a $2M cut
on the BOE side will mean decreased raises for $1M and cut in
staffing/programs for another $1M -- up to 20 positions-- world
language, freshman and middle school sports, etc.

2) Wage concessions are a DEFERRED COST. Guilford has consistently
kept its teacher salaries in the upper half, but not at the top of
comparable DRGs. If Guilford is too high relative to other DRGs we
will bring it down this summer when contracts are renegotiated. The
physical structures in Guilford (in the upper grades anway) are not a
big draw for teachers. Guilford has prided itself on the quality of
its teachers and students despite its ailing facilities, now we are
looking at negatively impacting our teacher quality.

This summer is when teacher contracts are renegotiated. Given the
economy and the outlook we absolutely need to be tough, and to look at
what happens with comparable DRGs in negotiating these contracts. But
opening up the current ones is difficult and very likely to result in
significant staff and program cuts.

This is not an extravagant education budget. It includes competitive
but not extravagant teacher salaries, good but not great class sizes
(as we get ready for a likely influx of students coming out of private
schools), a 10% cut in materials, no increase in maintenance, and two
positions cut already.

This budget is not just about education but is about quality of life.
While we can bicker about waste on the town or education side, both
would see extremely large cuts -- police, fire, charities, elderly tax
relief. These salaries go to local people that are not buying diamonds
-- they are cycling money through our local economy.

For too long Guilford has acted as if it can have the cake and eat it
too-- we want to have great schools with low per pupil cost and
minimal investment in infrastructure, we want to keep taxes low and
spending up so we draw down on savings.

Yes, this represents a tax increase. And it will be difficult. Taxes
will be going up even if millions are cut from the current. But it
gives the voters a chance to say why it is they choose to live in
Guilford.

Thanks for listening and hope to see you next Thursday 3/19,
Guilford fire/sefety complex at 400 Church St. (in the conference
room in the back near the basketball courts) at 7pm.

Chris