The General Assembly’s Finance, Revenue and Bonding Committee today passed several important pieces of legislation affecting towns and cities. All the details of this legislation are not available and this summary is based on a preliminary review of documents available to Committee members.

At the same time Republican Legislative leaders unveiled a new state budget proposal that, among other things, maintains state aid to towns and cities.

Bond Package

The Finance Committee passed a proposed state bond package that would, among other things:

• Establish a new $100 million “municipal block grant” for FY 09-10 that would provide municipalities with $40 million according to LoCIP, $40 million according to TAR and $20 million according to unemployment rates. This block grant would be in lieu of the existing LoCIP and TAR programs. It would provide $50 for LoCIP in FY 10-11. The uses of the money would be more flexible for municipalities than under either LoCIP or TAR;
• Establish a new $50 million “regional block grant” to encourage municipal cooperation (FY 09-10). This is the Committee’s alternative to Governor Rell’s regional incentive proposals (also $50 million). See below for a related funding proposal;
• Provide $10 million in each year of the biennium for STEAP (the Governor had not funded STEAP);
• Reduce proposed bonding below levels recommended by the Governor for the following:
  • Urban Act – no funding (Governor proposed $30 million in each year of the biennium);
  • Clean Water Fund G.O. bonds (used for grants) -- $65 million in FY 09-10, $40 million in FY 10-11. The Governor had proposed $90 million in each year;
  • Clean Water Fund revenue bonds (used for loans) -- $80 million in each year (Governor had proposed $175 million each year);
  • Aid for Municipal Plans of Conservation and Development—no funding (Governor had proposed $500,000 each year.

Additional Regional Incentives

The Finance Committee also passed a bill (a rewritten version of HB 6561), which would dedicate $50 million from the state sales tax revenue to fund regional capital costs and services or other cost-saving programs. Combined with the bond fund described above, the Committee would thus provide $100 million in regional incentives.

Other Actions

The Finance Committee favorably reported:

• HB 6559, a CCM proposal that would earmark future growth in state Indian gaming revenues for (a) PILOTs and (b) Pequot-Mohegan grants, and
• SB 1111 which authorizes school construction grants. The Committee appears to have rejected the Governor’s proposal to reduce the reimbursement rates for such grants, but maintained a provision that would limit school construction change orders to 5% of a project’s cost.

Republican Budget Alternative

House and Senate Republican leaders today released a “no tax increase” budget proposal that provides no cuts for towns and cities from general fund revenues (portions of grants that have been funded using state surplus fund for this fiscal year would not be funded).

CCM is preparing a detailed written analysis of the Republican proposals which we will send to CCM members as soon as possible.

For more information, please contact Gian-Carl Casa (gcasa@ccm-ct.org), Barbara Rua (brua@ccm-ct.org) or Jim Finley (jfinley@ccm-ct.org) of CCM at (203) 498-300