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May 11, 2009

Towns Need To Know State Funding - Soon
Editorial By: JAMES J. FINLEY JR.
Reprinted from the Hartford Courant

Spring will turn into summer and the start of a new fiscal year before we blink twice. The state budget clock continues to tick away as municipal budgets and property tax rates remain precariously up in the air in towns and cities across Connecticut. Three state budget proposals are now on the table as the governor and legislative leaders finally begin negotiations.

Towns and cities, forced to be dependent on an overused property tax and unreliable state aid, are up against the wall as they face municipal budget deadlines. Municipalities need answers from state leaders sooner rather than later.

Municipal officials are on the front lines, leading the way in making hard choices in Hometown, Conn. - finding efficiencies, reducing services, working with public employee unions to reduce costs, freezing and eliminating positions, and grudgingly looking at tax increases. And we know that in the end the state budget will also have to include similar steps.

The governor and General Assembly leaders should reach an early agreement on municipal aid - by Friday - that takes the best parts from each of the three budget proposals. Compartmentalizing and making an early decision on municipal aid will help struggling municipalities and their property taxpayers.

The Connecticut Conference of Municipalities is also calling on the legislature to pass special legislation that would allow municipalities to amend their local budgets and property tax rates after they have been adopted - once the final municipal-aid fiscal package finally is approved and signed. This would give communities that have already adopted their budgets the option to restore services and cut taxes after knowing the certain amounts of state and federal aid they will receive.

The governor, the Democratically controlled Appropriations and Finance, Revenue and Bonding committees, and the Republicans in the legislature have separate budget proposals. And although they share some property taxpayer-friendly aspects, they all differ in how much municipal aid they would provide.

For example, all three proposals agree on sustaining present levels of education aid. Education is the biggest piece of local budgets, so while flat funding doesn't keep up with local costs, it's a good place to start.

But non-education aid - used for things such as public safety, roads, senior centers, property tax relief and service continuity - would be cut under each proposal. Such aid should also be at least level-funded.

But there are bright spots. The Appropriations and Finance package would inject additional aid into magnet schools, road funding, local capital improvements, small town economic development assistance, and as much as $100 million to promote regional cooperation, including a new initiative to share some state sales tax revenue with regions.

The governor proposed significant funding hikes under the Urban Act for economic development, clean water projects, and $50 million in state bonding to encourage regional cooperation. The Republican budget proposal would help protect funding under the Pequot-Mohegan Grant as well as sustain current levels of education aid.

Protecting residents and businesses from property tax increases and cuts in local services will take a combination of approaches. The Connecticut Conference of Municipalities has presented a blueprint by which the state can provide property tax relief in the short and long term, using proposals before the legislature.

This plan focuses on protecting current levels of state aid, providing real relief from onerous state mandates, providing incentives for regional cooperation, and giving towns more flexibility to raise their own revenues.

In a very difficult year, the three state budget proposals have all, in different ways, made state aid to towns and cities a priority. Local leaders appreciate the hard work it took to do this.

Legislative leaders and the governor can and should move quickly to agree on maximizing municipal aid by taking the best elements from each of the budget proposals before them, and giving towns and cities a second chance to adjust their budgets and tax rates.

*James J. Finley Jr. is executive director and CEO of the Connecticut Conference of Municipalities.



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