Common Sense Fiscal Policies

It is easy to get caught up during the campaign season and make a variety of promises.  The difficult part is keeping them once you’ve gotten into office.  Republicans spent a great deal of time contemplating what we wanted to accomplish as elected representatives of the Public and responsible stewards of the Town.  There were a number of themes Republicans collectively spoke about during the 2009 campaign season:

  1. Spending and Fiscal Responsibility

  2. Data-Driven Decision Making

  3. Planning and Collaboration

  4. Transparency of Government

  5. Quality of Life

Many of these common sense principles are intertwined and related.  When there is a decision to be made, many of these themes are collectively taken into consideration.  Since it is about the midpoint in our terms, we thought it was appropriate to take stock of what was promised and what had been accomplished thus far.  In this first Republican Town Committee newsletter for 2011, we will focus on “Spending and Fiscal Responsibility”.

Did you know strong fiscal management is the most significant reason our bond rating is up and the interest rates we pay are low?

In order to best position our Town for continued financial stability, it is prudent to have solid fiscal policies.  We have a defined debt cap policy, a defined fund balance policy, and a goal to reach a “AAA” Town bond rating.  All of these policies are related.  If we have strong policies for both the debt cap and fund balance with strong fiscal restraint regarding our operating expenses, this will lead to a continuation of raising our bond ratings.  Raising our bond rating lowers our interest rates for borrowing which ultimately saves every taxpayer in Town money.  It’s all common sense.

In the last capital improvement cycle and the current, Republican efforts to collaborate are starting to bear fruit.  In the past, the challenge in determining future capital projects has been competing projects fighting for limited resources.  The requirements of some capital projects were so large and encompassing that there were little financial resources left for other projects.  Republicans steadfastly supported not only limiting the amount of Town debt to 10% of the operating budget but also lowering the amount of Town debt.  Therefore, we reviewed all capital projects in a manner different from the past.  In some instances, although all projects are worthy, projects had to be deferred in order for there to be a more reasonable expectation of how much debt the Town could afford.  Some projects were partitioned into smaller pieces to enable progress in multiple Town departments.  All of this scrutiny was done to support the debt cap policy and to limit the amount of Town debt.

Our fund balance policy is another important aspect to our fiscal health.  The fund balance is our savings account to protect the Town for unexpected emergencies.  Reliance on the fund balance for operating expenses creates a structural imbalance in the municipal budget.  It is important that annual revenues and expenditures be fairly balanced.  Too many neighboring communities have used their fund balance to close their budget gap and lower taxes.  Therefore, we have set forth on reducing our reliance on the fund balance.  Our goal is to reduce our reliance to zero.  Last year, we reduced our reliance by $1 million.  This year, the goal is to further reduce by the final $1 million.  Republicans have advocated for and acted on policy changes that support this common sense principle.

Did you know many neighboring communities have been downgraded in their bond rating?

Finally, there is the much-discussed Town bond rating.  Not only is our bond rating a reflection of the financial stability of the Town but also a reflection of the manner in which we manage to live within our means or not.  Having a favorable bond rating reduces the interest costs to the Town and is a direct benefit to all taxpayers.  Because of our strong fiscal policies and management, Newtown enjoyed another 

“up-tick” in our rating this past year.  Additionally, rating agencies, such as Standard and Poor’s, gave us a “Strong”, rating few communities enjoy.  It has been one of our core financial objectives for Republicans and as a Town to achieve the highest “AAA” rating.  The reason is simple, a better rating means taxpayers pay less in taxes.

Did you know over 2 million dollars of fixed costs was removed from the 2010-11 budget?

Republicans promised to look at all fixed costs and to make decisions based on solid data.  For the 2010‑2011 budget, Republicans strongly advocated for a reduction of over 2 million dollars.  We reviewed and investigated many fixed costs and found areas that could be reduced with little or no effect on Town operations.  It was also a hard look at needs versus wants.  Over the last year, many positive changes were made as a result of that focus.  Below are some examples:

  1. One health insurance consultant for both municipal and school

  2. Self-insurance for both municipal and school

  3. Review of all Bridges and Creation of Bridge Replacement Plan

  4. Review of all Roads and Creation of Road Work Plan

  5. Joint Committee to Save Energy Costs

  6. Organizational Analysis to Improve Efficiency and Contain Costs

Currently, there is also an effort, spearheaded by the Republican First Selectman, to review both the school and the municipal organizations to see if there is any efficiency to be found in the areas of accounting, human resources and facilities management.  That analysis will begin this spring with the help of a consultant.  The goal is to determine if our practices are the most cost-effective and efficient.  Another future potential cost-saving effort is to pursue a competitive bid in the insurance market to determine if our carrier is providing the best price for administering the benefits plan.  All of these efforts and more are geared towards ensuring that the taxpayers get the most out of their tax dollars.

What do Republicans Think?

This year’s budget process has yielded the most collaborative and transparent effort to date.  We believe supporting this budget and this collaboration will yield the long-term results that will benefit every Newtown taxpayer.  Republicans advance and promote these practices of financial discipline because we believe that the fiscal health of our community relies on that discipline.  Further, we believe that Newtown will be better poised to invest in our community when our financial ship is in order.  We will then have a greater opportunity to fund critical capital projects that are necessary to support the growth and development of our community. All taxpayers, current and future, will benefit.  Newtown Republicans continue to believe that it’s nicer in Newtown.