MANCHESTER — The Board of Mayor and Aldermen on Tuesday was presented with downbeat economic news on two fronts: a larger than anticipated rise in the property tax rate and a surge in demand for welfare assistance that could cost the city more than $220,000 in the current fiscal year.
The increase in claims at the Welfare Department forced Commissioner Paul Martineau, who has prided himself on keeping his budget in check, to seek additional funds from the aldermen for the first time in his 12 years in office.
The state Department of Revenue Administration last week certified the city's property tax rate at $22.67 per $1,000 of assessed value, a 2.2 percent increase from last year that slightly exceeds the tax cap of 2.17 percent.
Finance Director Bill Sanders explained at the meeting that DRA officials made use of financial data that was unavailable to his office as it formulated the current budget in the spring.
The biggest factor in the discrepancy, Sanders explained, was the more than $1 million decline in projected school district revenue from the tuition towns. "The most significant driver without a doubt is the drop in tuition students to Manchester," he said.
The city's tax cap restricts to the rate of inflation any year-to-year increase in city and school district expenditures and projected revenues, as well as the increase in the tax rate.
But Sanders noted that ultimately "the DRA process (setting the rate) is not subject to the cap."
'Couch-surfing' costs city
Regarding the rise in demand for welfare assistance, Commissioner Paul Martineau said it was due largely to the need to pay for emergency housing. Because the department no longer operates its own shelter, it must often pay for hotel rooms, he said.
The $218,000 estimate for additional funds for the year was based on a projection of demand for the first four months of the fiscal year.
Martineau decried a growing number of people he said were coming to the city for the purpose of obtaining assistance.
"They're coming from out of state' they're the ones who are surf-couching," he said. "The only problem is my hands are tied," he said.
Under state statute, local welfare offices must assist the needy.
Martineau added: "It isn't the elderly who come for help. Unfortunately we're enabling people to live like gypsies and abuse the system."