CCM is working with Governor and Legislators to advance proposed state budget as it affects towns and cities
Since taking office, Governor Malloy has demonstrated strong support for municipal aid, refusing to shift the state’s fiscal problems onto municipalities. Given new municipal revenue sharing adopted during the 2015 legislative session, which is funded through a dedicated stream of receipts from Sales Tax revenue, the Governor is proposing that some of the current grants for municipal aid be subject to the same level of across-the-board reductions faced by state agencies. However, the Governor has held the line on critical ECS grants by maintaining the same ECS funding level as in FY 2016.
The Governor’s recommended budget provides funding for motor vehicle property tax relief. Additionally, this budget maintains capital funding for several municipal grant programs and sustains commitments to retirement contributions and health service costs for teachers as well as debt service for the very generous support provided to municipalities for school construction.
CCM’s staff analysis of the proposed state budget also shows that: back to top
- Most towns and cities will see some type of increase in state aid overall; and virtually every community is being held harmless from cutbacks in state aid overall. The new revenue that towns receive from the sales tax helps ensures this.
- Overall, there are cutbacks in numerous state aid programs, including state payments in lieu of taxes (PILOT) and local public education grants, although there are no cutbacks for the State’s largest grant to towns -- the Education Cost Sharing Grant.
- The Governor’s proposal for a personal property tax exemption for businesses with total personal property valued at less than $10,000, which would affect 46 percent of all businesses, would deprive towns of significant property tax revenues.
- The Governor also called for reforming the process for the “implementer” bill for the state budget to bring back greater transparency and avoid unvetted state law. His proposal mirrors one of the key recommendations presented in the final report from the Project B.E.S.T. Summit organized by CCM, CBIA and CT AFL-CIO.
Although it was not included in the Governor’s proposals, one of CCM priorities regarding mandates relief remains amending the Municipal Employee Retirement System (MERS) to establish an additional retirement plan within MERS, for new hires, that would: (i) maintain a defined benefit plan modeled after the State Employee Retirement System’s Tier III; and (ii) change the plan for new employees hired after a certain time period to be part of a town plan, instead of the existing plan.
CCM is continuing to examine the budget proposal, and will provide further information once the proposal has been more thoroughly analyzed.