Norwich city manager outlines proposed FY 2025–26 budget, cites $3.6 million state revenue loss and proposed 35.23 mill rate

City Manager John delivered an overview of the proposed fiscal 2025–26 budget, saying the city faces a roughly $3.6 million shortfall in state revenue and is proposing a mill rate of 35.23 to balance the gap.

John told the council the city’s “collectible grand list” was effectively flat and that changes in state vehicle-assessment rules cut approximately $32,000,000 in assessed motor-vehicle value, contributing to the revenue loss. He said: “We had to reduce our collectible grand list by 32,000,000 dollars of assessed value.”

The nut graf: The shortfall and other revenue changes — including lower payments tied to Norwich Public Utilities gross receipts and a decline in certain state grants — are driving proposed reductions and targeted increases. The city manager framed the budget as an effort to preserve essential services while continuing planned capital investment and debt service tied to school construction and other projects.

In his presentation, John outlined the principal revenue and expenditure drivers: a near‑unchanged grand list overall, a $32 million reduction tied to motor-vehicle reassessments, about $2.9 million lost from a state car‑tax calculation, another $600,000 from pilot payments, and approximately $1 million less from NPU gross revenues. Together the state-related and utility revenue changes, he said, total roughly $3.6 million.

On expenditures, he highlighted education, salary and fringe benefits, and debt service as the major pressures. The Board of Education requested roughly $4.7 million more than the current year; the city manager recommended a 1% increase in education funding (about $1 million) while noting the board will receive Alliance District funds that the manager said would add about $2.1 million to the schools’ resources.

John described a projected increase in debt service driven by a voter‑approved $385 million school bond program. Using the state’s school construction reimbursement assumptions (the manager said the state covers about 80% of eligible school costs for early projects), he showed net annual debt service rising from about $5.3 million now to as much as $14 million at the program’s peak. He warned that the debt-service increase could require future tax increases to sustain both capital and operating services.

Faced with revenue pressure, the manager said the proposed operating budget includes staff reductions. “In my 10 years of budgeting, this is the first time I’ve actually had to propose or, in the end, actually propose, layoffs,” he said, identifying seven positions total — four filled positions (which he said would become layoffs effective July 1) and three vacant positions that would not be filled.

John also described continuing efforts to secure grants and economic development to offset revenue losses: a state Community Investment Fund (he cited a $550,000 state grant toward the Reed & Hughes redevelopment), approximately $11.3 million in state CIF grants for other projects, federal RAISE grant funding previously allocated for Aacom Industrial Center roadway work, and the Norwich Economic Development Corporation’s short‑term debt for land acquisition at Aacom. He said the city is marketing Dodge Stadium and hopes proceeds could reduce budget gaps if a sale closes quickly enough.

The manager proposed modest fee adjustments in some permit areas and noted a continuing capital‑project set‑aside (charter‑mandated 2% of the budget) for infrastructure. He said Friday/next‑steps include department meetings and a public hearing schedule: council public hearings on the budget on April 16 and May 12, follow-up hearings on May 12 and a tentative adoption date of June 2 (charter allows up to June 9).

The presentation concluded with the manager stating the proposed mill rate of 35.23, an increase the manager said is driven primarily by state revenue losses and rising debt service. He closed by noting the council will continue departmental meetings and public hearings before final adoption.

Ending: The council did not take final action on the budget at the meeting; staff and council members will meet department by department and hold several public hearings before a final vote. The manager scheduled those hearings and said adjustments will be possible as new grant or sale proceeds materialize.