Letter: Both budget scenarios put forward by Board of Finance are economically foolhardy
The following letter was written to the Board of Finance for public comment on the Board of Finance budget dicussions regarding making cuts to the Board of Ed budget to be held Tuesday at 5 p.m. It was reprinted here at the author’s request. The meeting will be televised on Darien TV 79.
To the Editor:
I am writing to you as a 17-year-resident of Darien and a parent of two children in the public school system. While this letter is not the place to discuss and critique the underlying assumptions put forth by the Board of Finance, the plans proposed not only impair services but also negatively impacts the most important asset in Darien; its nationally recognized Public School District.
Draconian cuts to an already bare boned Board of Education (”BOE”) budget will have significant negative second order effects on the second most important asset in Darien; the value of its residential property.
Per Darien’s annual financial report for the fiscal year ended June 2019, residential property accounts for roughly 86% of the total taxable assessed (almost $7.4 billion in assessed value and $10.5 billion in estimated actual taxable value) value in Darien generating almost $119 million in tax collections.
Households in Darien over the years have numbered around 6,500, implying an average “actual taxable value” of $1.6 million per taxable residence in Darien. Applying a 70% discount factor and the town’s direct tax rate implies an average annual property tax per household of roughly $18,000.With that baseline established, the Board of Finance’s two proposals; “Flat Mill Rate” and “Flat Total Tax Levy” proposals are economically foolhardy over the short and long-term.
In the “Flat Mill Rate” proposal, the Board of Finance proposes cutting $1,323,000 from the Board of Education budget. While I am not an educator or administrator, it is likely a safe assumption that the costs to deliver a first-rate education in the 2020-2021 school year has increased as a result of the COVID pandemic.
Moreover, roughly 84% of the BOE budget is essentially fixed. A $1.3 million cut is roughly a 7.9% cut to the operating budget that is already more than likely to face pressure as new procedures and policies are implemented as result of the COVID pandemic. In the “Flat Tax Levy” proposal, the cuts are so draconian that the Board of Finance in my opinion had to recognize this proposal was a non-starter. In my professional experience, this scenario was compiled and put forth by the Board of Finance to simply provide cover and provide a psychological “anchor” for the equally fool hardy “Flat Mill Rate” proposal on the hope that taxpayers and residents fall prey to the view that the “Flat Mill Rate” proposal “is really not that bad” compared to the “Flat Tax Levy” proposal.
Lastly, if a $1.3 million “cut” to the BOE budget was enacted, the average property tax savings per household per year would be just $200. If concerns percolated around Darien’s crown jewel, its education system, because of this fool hardy proposal, the value of Darien residential real estate could be impaired by orders of magnitude compared to the $1.3 million in one year savings destroying asset values in the town and putting more pressure on the future finances of the town. These proposals provide little in the way of near-term economic relief for Darien residents while raising substantial long-term risks to the value of Darien’s two most important assets; the Public School District and its valuable residential property.
Are you willing to cut educational services, programs, teachers or athletics in return for an immaterial tax savings while potentially impairing taxpayers valuable residential property?