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Candidates pledge to scrutinize town budget
By Liz Boardman/Independent Staff Writer
SOUTH KINGSTOWN — Financial troubles at the State House and on Wall Street will likely bring tough choices to High Street, and the next Town Council will need to grapple with how to live with less.
This week, state officials announced revenues were $33 million behind projections for the first three months of the fiscal year, which began July 1, and they already have dipped into the Temporary Disability Insurance reserve to make aid payments to cities and towns. Add the uncertainty of investment income, which netted the town $1.3 million last year, $500,000 more than budgeted, and South Kingstown is looking at a tough budget year.
We posed this scenario to the 10 Town Council candidates and asked them for specific ideas on where dollars might be found and stretched or cuts made, to gauge how they would lead once elected. We heard from nine of the 10 candidates. Republican Bryan Owens did not respond.
“Before we talk about cuts the council needs to make, we have to know what the state budget is going to look like,” said incumbent Kathleen Fogarty, a Democrat. “When the governor releases his budget in January, we will know what we are up against. However, I believe the approach of the council will not change. We will look at the budget program by program, as we do every year, to see where we can save money.”
“To ask a candidate to take a knife and make specific budget cuts in any one area of the town budget is like asking a family to save money this winter by not turning on the heat,” said Carol Hagan McEntee, an endorsed Democrat. “In attempting to balance our household budgets this year, we will all make sacrifices. We may turn down the heat to save money, but we won’t turn it off completely. We may delay a home improvement, but not forever. The same goes for municipal budgets.”
“We need to examine every line item in the budget and plan according to the needs of our future,” said Ella Whaley, incumbent Democrat.
Independents Stephen Garnett and Ken Capalbo and Republican Sean O’Donnell favor zero-based budgeting, which would require each department and program to justify each dollar they request, rather than starting with the amount they received the previous year and adding an increase.
“The first thing I would do if there is any reduction in state aid this fiscal year is to ensure all town departments justify that each dollar of taxpayer money spent is necessary,” Capalbo said.
“I believe in zero-based budgeting,” Garnett said. “We cannot pay out more than we take in.”
As part of this process, O’Donnell said he would consider spending down the town’s unrestricted net assets – money in reserve funds that is not permanently or temporarily restricted by donor-imposed rules.
“For several years, the council has allowed over-taxation,” O’Donnell said. “Rather than leave these funds with property owners, so they can do what they wish with their money, the council has allowed dollars to be invested in an uncertain market, thus creating an unnecessary loss.”
Capalbo said he, too, would advocate for spending a portion of the undesignated fund balance.
“The fund balance as a percent of the 2008-2009 General Fund was 12.93 percent,” Capalbo said. “The General Fund’s undesignated fund balance should be between 10 and 15 percent of the value of the General Fund. A cut in state aid in the middle of a fiscal year would justify using a portion of the balance to make up that cut. This is why we have an undesignated fund, and it is a prudent use of it.”
O’Donnell would allow an operating loss in the current fiscal year and begin zero-based budgeting with the next fiscal year.
“This will only bleed off the unrestricted net assets for the current year, giving taxpayers back what they have overpaid,” O’Donnell said.
Democrat Spencer Dickinson said he was not an advocate of zero-based budgeting.
“But as a newcomer, I would bring something to the process – when I look at the town budget, it is all new to me,” Dickinson said. “I also bring the valuable experience of having worked on the state budget as a member of the House Finance Committee for three years.”
Encouraging public input also would be critical, Dickinson said, so taxpayers play a role in setting the town’s priorities.
“At the last candidate forum, I stated that property taxes should start at a zero percent increase level,” said incumbent James O’Neill, a Democrat who is running as an independent. “But no more than 2.4 percent or one-half of the state formula. That is now wishful thinking. The Town Council must reduce the property tax, not just lesson the increase. Taxpayers are hurting. Their largest asset, real estate, has fallen in value. Unfortunately, our property tax rode this inflationary bubble and now, too, this must be reduced.”
Several candidates suggested a close watch on personnel.
“Jobs that have been vacated should be scrutinized,” said incumbent Mary “Polly” Eddy, a Democrat. “The jobs that are vital should be filled. If a replacement can be postponed, do it. We are used to a high level of service in South Kingstown, but we may have to live with less in the near future.”
“We will study the replacement of retired positions that could secure some savings,” Whaley said.
“The town should be very cautious in adding any new staff positions,” said McEntee. “As budgeted positions become available through an employee’s retirement, the position should not be filled until a review determines that the position is absolutely necessary. The vacancy would have the obvious effect of reducing the town budget by the cost of the employee’s salary, but it would also save the town money in health insurance and benefit costs.”
O’Donnell would call for a one-year hiring freeze and look to eliminate positions as staffers move on or retire.
“The Town Council has already begun a program of cutting back in replacement hiring,” said Dickinson. “This will mean spreading the workload around in some departments, and even some extra work for certain employees. But hopefully, they have been treated fairly over the years and will do their part to help get us through this.”
Others would look at the capital improvement plan, which guides spending to build or improve buildings, parks and town roads. Setting this budget – which is paid for from reserve funds and bonding – is the first step of the budget process.
Fogarty said the council would need to review the capital budget to see what items or repairs could be deferred.
“The council has always been aggressive in payment of its debts,” Fogarty said. “Like running your own home, we plan to pay off our bills – past bonding – as soon as possible to save on interest.”
Postponing items in the capital budget, such as a community gym voters approved in a bond issue, would avoid increased debt service, Fogarty said.
Eddy agreed.
“I think the community gym is something that can be postponed,” said Eddy. “The citizens have voted the bond money, but if we don’t use that money we will not have to pay the interest on it.”
Some would look to economic development to bring in extra tax dollars.
“We could implement the tax treaty and continue to offer our no-split business tax, as an incentive to draw new businesses to our town,” Whaley said. “We also need to strengthen our working relationships with all businesses, especially the University of Rhode Island, South County Hospital and South County Commons, which has delivered a significant financial return to the town, offsetting the taxes.”
Whaley also would look to develop partnerships between schools and businesses.
“Our children could shadow our professionals in the community, while businesses could gain some of the youth work force at no cost,” Whaley said. “Many of our children graduate from college and move to other communities. Setting a frame of mind to support our businesses would foster a culture that could better support economic development in the next three to five years.”
“We must aggressively explore, encourage and promote economic development in our town,” said McEntee. “In this way we can develop a broader tax base and thereby reduce the tax burden on the property owner.”
She said South County Commons has brought innovative businesses to town; the university’s expansion could bring housing, an inn, restaurants and small businesses to Kingston; and the mills in Peace Dale are ready to be developed “for a mixture of commercial, retail and residential use.”
Several candidates also pointed out that 80 percent of the town’s budget goes directly to the school district, and the Town Council has no control over its line-item spending.
Liz Boardman can be reached at boardman@scindependent.com.
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