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GREENWICH STYLE – THE 30 PERCENT

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Tuesday night’s meeting of the BET Budget Committee brought no budget guideline surprises. As expected, the 4-member committee failed to approve any guidelines. The 2-2 vote was split along party lines, with Republicans voting in favor of the draft that was before the committee, and Democrats voting against.

But what’s surprising is that, prior to the vote, Budget Committee Chairman Joe Pellegrino gave a speech in which he championed the third of Greenwich residents who have incomes at or below $50,000. He, and presumably the rest of the BET Republicans, now claim to be champions and advocates for Greenwich’s economically disadvantaged and most vulnerable citizens.

According to Pellegrino, that’s the rationale for Republican insistance on a $340,400,000 cap on total operating costs and no more than a 2% mill rate increase in these operating costs, something totally unacceptable to BET Democrats.

Pellegrino said his main concern is to serve the interests of the 30% of Greenwich households with incomes below $50,000. They’re the ones who can’t afford any increases in their property taxes.

What’s wrong with this picture?

Everything.

Many of those in the income group that Pellegrino claims to be most concerned about are actually among those most in need of the services likely to face cuts with the Republican budget proposal. Moreover, those in this income category are also the least likely to be affected by property tax increases since they are, for the most part, either residents of public housing, renters in the private market who don’t pay property taxes, or senior citizens who have owned their homes for many years and are likely to have no mortgage and be eligible for town and other senior tax relief programs.

If indeed Pellegrino is most concerned about this income group, one way the BET could help is to raise the income limits for senior tax relief eligibility. By contrast, the Republican austerity budget guidelines proposal are likely to harm this income group.

To put it bluntly, the budget guidelines that BET Republicans propose use the recession, from which we are in fact recovering, as an excuse for austere budgetary measures while masking this agenda in language that claims to help the economically disadvantaged.

However, the ultimate effect is to reduce taxes on Greenwich’s wealthiest residents, while reducing services to Greenwich’s less wealthy citizens. It’s no accident that Greenwich’s District 7, the proponents of the RTM sense of the meeting resolution that was the original driving force in this austerity agenda, has the town’s highest median household income.

Peter Berg, RTM member from District 8, chairman of the RTM’s Land Use Committee and a former BET member, has put together some interesting statistics that are important for us to keep in mind regarding the argument that property tax increases have an adverse impact on those with incomes below $50,000.

He sent this information to Bill Drake, Chairman of the RTM’s Budget Overview Committee last April in response to a BOC financial report. With Berg’s permission, I reproduce here the bulk of the email he sent to Drake, acting as an individual RTM member from District 8, and not in any official capacity. All the information he has put together comes from U.S. Census data.

Here are the results of Berg’s research as conveyed to Drake in an email:

Some readers of the BOC Financial Report may conclude that, since 20% of Greenwich Households have annual incomes below $50,000, those households are very sensitive to increases in property taxes; and therefore, the Town needs to hold down increases to property taxes, even if that means cutting desired services or delaying important capital projects.

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Readers need to consider, however, that 26.9% of Greenwich “Households” are not “Homeowners” and therefore do not pay property taxes. Households living in rental houses and apartments and those in senior or low-income housing projects in town may be relatively unaffected by increases in property taxes (especially in times of excess supply).
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In some densely populated Greenwich neighborhoods, including Downtown (49%), Chickahominy (61%), and Byram (50%), fully half of households are tenants, not homeowners.
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While the Census shows that 20% of Greenwich households have annual incomes below $50,000, that percentage varies widely by Census Tract, from a low of 5% in Census Tract 102.01 (roughly RTM 7) to a high of 37% in Tract 107, the neighborhood west of Milbank Avenue that includes Milbrook but also several large senior and low income projects; 46% of households in Tract 107 are tenants, not owners.
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Furthermore, consider that many Greenwich homeowners are “Retired,” with no mortgages and no dependents, but with substantial retirement assets; such households typically manage their annual incomes to match expenses and avoid paying income taxes. Increases in property taxes are affordable to such homeowners; they just need to take larger distributions.
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Certainly, there are homeowners in Greenwich who are squeezed when their property taxes go up, but it is probably misleading to suggest that the percentage is as high as 20% of Greenwich households.
Let’s not delude ourselves that the austerity measures BET Republicans propose benefit middle and lower income Greenwich residents. Proponents are much more concerned with upper income residents.
But where do we go from here.

If there are to be any budget guidelines this year (and under the circumstances, it might not be a bad thing if there aren’t), it’s up to the full 12-member BET to agree on guidelines at its regular monthly meeting Monday night. But unless there are dramatic changes in viewpoints, such agreement will not be forthcoming.

Here’s the likely scenario.

Since there were no guidelines approved by the Budget Committee, there are no guidelines for the Budget Committee Chairman to move on behalf of his committee, as would normally be the case. Instead, an individual member of the BET, probably Budget Committee Chairman Joe Pellegrino, will make a motion to be seconded by another individual member of the BET, probably the other Republican Budget Committee member, Leslie Tarkington. This motion will be to approve the same draft that the Budget Committee failed to approve, a copy of which will be in the board package that is disseminated at the end of this week.

At that point, during discussion of the motion and before any vote, a Democratic member of the BET will likely propose an amendment to the motion, to be seconded by another BET Democrat. This motion and second to amend will probably come from the two Democratic members of the Budget Committee, Bill Finger and Jeff Ramer.

The motion to amend will essentially be a motion that offers alternative draft budget guidelines. Faced with Republican intransigence regarding what they considered the most critical aspects of the guidelines, BET Democrats have crafted their own budget guidelines that incorporate their often voiced viewpoints that were ignored by their Republican colleagues.

These alternative Democratic draft guidelines will be included along with the Republican draft guidelines in the board budget package.

There will be speeches and discussion preceding a vote on the motion to amend.

The vote on the motion to amend will be unsuccessful resulting in a 6-6 party line vote. The vote will then be on the original motion, which will again split 6-6 along party lines. But that motion will pass, assuming Republican BET Chairman Mike Mason casts the chairman’s tie-breaking vote in favor of the Republican draft that the Budget Committee failed to pass.

That draft, originally prepared by Pellegrino, has undergone changes in language since the original version that was prematurely posted online and somehow distributed to the RTM Budget Overview Committee, even before the BET Budget Committee had its first serious discussion of this draft, with the BOC voting to approve the Pellegrino draft long before the Budget Committee vote.

Pellegrino’s changes were intended to reflect comments on his original draft made by nine BET members, as well as the First Selectman. In making these changes, however, Pellegrino remained uncompromising in his call for a $340,400,000 cap on total operating costs and a 2% mill rate increase over FY 13.

The very idea of such a cap, as well as initial insistence upon an historically low mill rate increase, were unacceptable to the Democrats, who were concerned about the impact on town services.

Hence the alternative Democratic guidelines, soon to become public but that will contain no surprises. The Democratic guidelines are expected simply to reflect the proposals Finger and Ramer have been making all along over the past two months that have been ignored.

I’ll post more about the Democratic alternative guidelines when they become public, probably Friday. The deadline for inclusion in the BET Board package is Thursday evening.

It’s an unprecedented situation. It’s a bad situation. It’s a situation that ultimately undermines the BET’s credibility and the community’s respect for the BET as an institution. Never before have BET Republicans and Democrats been unable to come to consensus on basic budgetary matters.

With irreconcilable partisan splits now on the BET and the Board of Education, where once there was true bipartisan cooperation, we’re beginning to look like Washington.

It’s very sad.

Categories: General

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2 Responses

  1. Alma Rutgers says:

    Frank, calm down, go back, re-read the entire posting and note that there’s nothing anti-Democrat in it. To the contrary. If anything, it takes the Republicans to task. What you say makes no sense.

  2. Frank Farricker says:

    In this instance, you decry the lack of “bipartisanship”. This is just pathologically wrong. To the best of my understanding, the Democrats will most likely propose something exactly like the current status quo. The Republicans will be proposing something radical. Yet you infer that they should just “get along” and, like the dreaded MSM, assume some kind of fake bipartisanship moment will just be the magic sauce. Give blame where blame is due, and thats bringing in ideologically-motivated budgeting to Greenwich by Joe Pellegrino and the Republicans. HAving an alternate view that is both in spirit with the Town’s past practice and protective of basic rights and services is not an alternate here, its plain common sense. Please dont give equal measure to both and then be sad.