Submitted by Scott Kalb, Chair, RTM Finance Committee; BET member, 2024-2025
Greenwich take note, Republicans want to raise your taxes – a lot.
Not what you expected, right? But it’s true. Just check the transcripts from the Debt Policy Committee meeting of the BET, on September 16. The Chair of the Republican caucus suggested that the capital tax levy, funded by your taxes, should be increased by $5mn per year for the next eight years, to help pay for capital projects in town. It was an eye-popping moment, and Greenwich townspeople, Republicans and Democrats alike, should be extremely concerned.
Here is the background. Our town is facing a lot of critical capital projects, projects that could have been spaced-out over time but that were delayed over the last ten years by previous BET Republican leadership. Now the bill is coming due for these projects all at once, including the long overdue repair or replacement of our crumbling 50-100-year-old public schools, and 60-year-old skating rink.
Traditionally, there are two levers to pay for capital projects – cash (taxes) or long-term bonds. Best practice is to use a prudent mix of both. Yet, the Republicans on the Debt Policy Committee, including the Republican BET Caucus chair, voted against allowing the town to issue longer-dated municipal bonds, stating they would rather stick everyone with enormous tax increases.
To be clear, it is normal policy to use longer-term municipal bonds to finance projects that have a 50-to-75-year life, and it is 100% bipartisan.
Democrats and Republicans work together around the country to fund infrastructure projects, and they always use long-term bonds. The Town of Greenwich currently issue bonds with only 1-5-year maturities, as close to cash as you can get, yet there is NOT ONE other triple A rated municipality in the state and in the country, including Republican controlled municipalities, that uses short-term municipal bonds to fund long-lived projects, like schools or ice-skating rinks. It begs the question – why do Greenwich Republicans think they know better than everyone else in the country? And whose interests are they serving?
Municipalities use longer-term bonds to gain some breathing room, allowing their existing tax base to catch up with infrastructure payments over time. When capital projects pile up as is happening in Greenwich today, paying them off in one-to-five years puts a huge strain on the current budget and on taxpayers. Without reasonable longer-term financing options to balance the budget, big tax increases become the only way forward. This is what the Republicans are proposing. By depriving our town of its ability to issue longer dated bonds, we lose a critical financing tool, and our financing capacity becomes no more efficient than a one-armed coat hanger.
I suspect BET Republicans do know better, but underlying their position is a political message – “either you cut spending on the infrastructure our town needs (and townspeople want), or we will force big tax increases.” In the last budget cycle, Republicans on the BET cut $4 million from the school budget – and they were thrown out of office by the biggest margin in town history because of it. Limiting the town’s ability to issue longer-term debt is just another way for them to try and force spending cuts again.
Debt policy has big implications not only for current projects but future ones too. Without the lever of longer-dated bonds, future projects like renovating Riverside School and Julian Curtis, replacing the collapsed GHS swimming pool and tennis courts, or renovating Holly Hill to make it safe, all come into question. It also leaves our budget with very little buffer to manage emergencies that may crop up in the future.
We currently have a Democratic controlled BET, and at the next meeting, all six democrats will certainly vote in favor of using longer-term bonding for select future projects facing the town, like Hamill Rink. Still, according to our town charter, seven votes on the BET are needed to approve bonding, and we need at least one (two would be nice) Republicans to break ranks and support it.
I urge Republicans on the BET to vote in favor of issuing longer-dated bonds for select future capital projects instead of relying on huge tax increases. Twenty years ago, under Republican leadership, the BET voted to approve the use of five-year bonds to help finance projects in town. That policy has reached the end of its useful life, as construction and operating costs have soared over the last two decades. It is time to bring our debt policy into the modern age and embrace prudent longer-term bonding solutions for long-term projects.
One final note – budget and bonding resolutions must be submitted by the BET to the RTM for approval. I expect the RTM will be very skeptical of a budget that relies solely on huge tax increases and short-term cash bonds to fund the long-term infrastructure needs of our town.