Towns Rattled By State's Budget Uncertainty
Hartford Courant, June 7, 2017
If legislators can't get their act together and pass a state budget when they're supposed to, how can they expect municipal governments to do the same?
Time and again, the state's General Assembly has failed to pass a budget by its official adjournment date, which this year is this Wednesday. Legislative leaders have already conceded they won't make that deadline.
That puts town and city officials in a quandary. They are required to balance their budgets and get their property-tax numbers to the state by July 1 or face penalties. To penalize towns for failing to do what the state legislature can't do seems unfair. (The state apparently recognizes this and is offering to consider penalty waivers this year until Aug. 11.)
In years past, municipalities could generally count on a minimum level of state aid, no matter how much the Capitol fought over the final funding package. They could take educated guesses on how much money was coming their way, and those guesses were usually pretty good.
But now, with the state reeling from financial trouble and legislators unable to agree on how to set it right, it's anyone's guess how much aid municipalities might get.
Also complicating things is Gov. Dannel P. Malloy's proposal to shift hundreds of millions of dollars in teacher retirement costs onto local budgets.
"The level of municipal aid has never been as much in question as this year," says Betsy Gara, executive director of the Connecticut Council of Small Towns. "At this point, it's all up in the air."
Towns such as Southington have had to delay budget votes — thereby violating their own charter rules.
Towns that have gone ahead and passed budgets despite the uncertainty may need additional tax increases to cover state cuts coming their way.
How to help towns back to top
How to help towns and cities struggling because of the state's indecision? A few suggestions:
1. The state House of Representatives has wisely adopted a measure that would let municipalities revise their budgets after they've been adopted — even if local charters prohibit such revisions. The state Senate should do the same, and the governor should sign the bill.
2. The state has to give towns and cities more flexibility in getting school costs under control, though it has granted some already. This is especially true if a portion of teacher pension costs get dumped onto towns.
Education is usually the biggest piece of a town's budget — often three-quarters of the pie. But school budgets are largely dictated by the state, which prohibits a town from reducing spending below the previous year (with some exceptions). And boards of finance can't cut specific line items in school board budgets, only total amounts. As the courts have said, "In this state, local boards of education are not agents of the towns but are creatures of the state."
The state has to, in the words of the Connecticut Conference of Municipalities, allow towns and cities "more control over non-education expenditures and boards of education, to achieve efficiencies without sacrificing quality education."
3. State binding arbitration rules make it difficult for towns to negotiate savings in teacher pensions, wages and benefit levels. Towns need more flexibility in those as well.
They need, for example, for arbitrators to base their decisions on a town's ability to pay rather than on what other unions are getting.
Connecticut's excellent schools are its best selling point, and most taxpayers want to support them financially. But towns do need more flexibility to deliver services efficiently and still maintain that envied high quality.