MANSFIELD – Amid mounting speculation in Hartford about a decrease in state funding to municipalities, town officials are considering reductions to education spending to compensate, Deputy Mayor Bill Ryan said.
“There are always places we can try to cut costs in the schools,” Ryan said.
Since 2010, the Town Council has not reduced education spending, which, like in most state municipalities, is its largest annual expenditure. The town’s education budget for the current fiscal year is $22.9 million — 42 percent of the town’s total expenditures of $52.2 million.
However, in anticipation of state funding cuts, Ryan said town officials are not ruling out reductions in education funding.
Ryan’s comment comes amid speculation the state may restructure, or at the very least reduce, its PILOT grant program that Town Manager Matt Hart said Mansfield has historically been “very reliant on.” PILOT, or payment in lieu of taxes, reimburses municipalities for tax revenue lost on tax-exempt, state-owned land.
More than 52 percent of the land in the town is state-owned, including the University of Connecticut, Eastern Connecticut State University and the former Bergin Correctional Institute.
In the 2016–17 fiscal year, Mansfield saw a $3.3 million increase in state funding from the previous year largely due to $2.6 million it received in a “select pilot” account established by a General Assembly bill passed in February that grants certain municipalities with additional PILOT funding.
The $2.6 million select PILOT grant was the fifth highest amount of all state municipalities, behind much larger municipalities like Hartford, New Haven, Waterbury and Bridgeport.
Mansfield officials anticipate total money from PILOT grants to be reduced in the upcoming legislative session. Other major municipal grants, such as education cost sharing, “ECS,“are also expected to shrink as a result of the state’s $1.4 billion projected budget deficit in the coming fiscal year.
Board of Education chairman Randall Walikonis said though the town has not been forced to reduce education spending in several years, pending cuts could leave no choice.
“Mansfield is a great town for education because it very strongly believes in education, so we have had less pressure to cut budgets than some of our neighbors have,” he added.
“It’s getting tough,” Walikonis said when asked about about state funding cut’s impact on Mansfield’s education expenditures. “The state budget does worry me.”
Last fiscal year, the Board of Education’s total budget rose $828,866, about 4 percent, after only increasing about $600,000 from 2010 to 2014, a 2.9 percent increase.
“If we end up losing more money from the state and we have to actually contract our budget, the things we would look at to cut would be salaries and programs,” Walikonis said. “Salaries and benefits make up 85 percent of our budget, so there’s not an easy way to reduce our budget without impact staffing.”
Walikonis said that in past years, the Board of Education has eliminated positions to balance its budget, and “there could be more” if the budget is reduced in the upcoming year.
In addition to reducing faculty, Walikonis said the board would consider eliminating school programs, including sports, technology education and afterschool programs at its elementary and middle schools. Walikonis added that although the board has resisted adopting a “pay for play” system in which students pay money to participate in athletics, it could be an alternative to cutting programs entirely.
The rise in education expenditures in the last fiscal year stemmed mostly from increasing health insurance costs paid to tenured faculty, an expense Walikonis expects to decrease and stabilize in future years.
“The previous couple of years, some of our employees had some very expensive medical treatment that was needed. And so our budget benefits weren’t completely adequate and we exceeded it month after month,” Walikonis said. “In the last year, those costs have come down significantly. So I’m expecting that we will not have a very significant increase in health insurance costs, which will help a lot.”
Despite the projected state budgetary deficit, Walikonis said he remains “optimistic” that local revenue generated from the new downtown Storrs Center can alleviate a need for cuts in education.
Mayor Paul Shapiro said, “my predecessor Betsy Paterson knew that we would always be struggling with PILOT, so part of her answer was commerical property, and it makes for a better quality of life, makes for amenities we didn’t have, and it also provides a revenue stream for the town that we did not have before.”
The downtown area is estimated to generate $2.9 million of revenue in the current fiscal year.
“Real estate alone has increased $28,589,430, or 3.19 percent, primarily due to the growth at Storrs Center,” Hart wrote in May budget documents.
Though revenue from Storrs Center has steadily increased since it began construction in 2011, Shapiro said revenue could see a halt in coming years.
Developers in the downtown area have entered a tax abatement program with the town in which they pay a reduced rate on property taxes in the first seven years upon initial development. The abatement rate incrementally decreases over seven years. Shapiro said the change in abatements has, in part, caused fluctuations seen in the town’s tax revenue.
“Once the taxes are fully phased in… The revenue will be stable and not growing; it will be part of our revenue base” Shapiro said.
Mansfield plans for the town budget through conservative projections. This comes from practice in the last fiscal year, 2016, when Connecticut Gov. Malloy proposed an unexpected second budget, causing towns to re-evaluate their own budgets.
In April and May of 2016, the budget set at the town meeting was assumed the worst, according to Shapiro. “That is how you manage the uncertainties, in a town that is so heavily reliant on PILOT,” Shapiro said.
“We never stop working until we know what the final number will be in terms of PILOT,” Shapiro said.