CCM says $50M In Mid-Year Budget Cuts To Municipalities Is Untenable

CCM says $50M In Mid-Year Budget Cuts To Municipalities Is Untenable

CT News Junkie, December 30, 2016

by Christine Stuart

For the first time in more than six years municipalities will have to figure out how to deal with a mid-year cut to education funding.

Office of Policy and Management Secretary Ben Barnes let municipalities and legislative leaders know it was exercising its ability to cut $20 million in municipal aid and $30 million in funding for local construction projects.

In order to balance the 2017 state budget Barnes said the cuts are necessary.

In a letter to legislative leaders, Barnes said it was “necessary to act now” to implement the spending cuts in order to balance the 2017 budget.

Education funding was reduced between 25 and 90 percent for the 25 wealthiest communities, and 68 of the poorest communities will only lose 1 percent or less of their grant. Distressed municipalities such as Hartford will receive $250,000 less and wealthy towns like Greenwich will lose up to 90 percent or $1.3 million of its education funding.

In addition, the state has also suspended $30 million in grants to municipalities for local construction projects through the Local Capital Improvement Program. Legislative leaders learned of the decision on Thursday.

That’s on top of earlier cuts made in the budget approved in May.

The $19.76 billion state budget for fiscal year 2017 reduces local education funding by about $68 million and municipal property tax relief by about $27 million.

Towns oppose cuts back to top

Organizations representing municipalities said this means towns will have no choice but to layoff employees and suspend crucial infrastructure projects.

“We recognize that the state continues to face huge budget challenges, but midyear cuts to municipal aid will leave towns scrambling to address budget shortfalls,” Betsy Gara, executive director of the Connecticut Council of Small Towns, said. “Towns facing cuts in municipal aid will have little or no choice but to delay or suspend critical projects and/or lay off personnel.”

Gara said property taxpayers are already digging deeper to fund a larger portion of education and infrastructure each year without any relief from unfunded state mandates.

She said if local aid is on the chopping block then the state needs to get serious about mandate relief.

“Until the budget deficit is fully addressed, lawmakers must adhere to a moratorium on any new unfunded mandates and push for meaningful changes to provide towns with relief from mandates already on the books,” Gara said.

Jim Finley, a consultant to the Connecticut Coalition for Justice in Education Funding—the group that filed the landmark education funding lawsuit against the state—said the decision “underscores the importance of the judicial action.”

A Superior Court judge found in September that the state largely abandoned the Education Cost Sharing grant in 2013 and has been allocating a set dollar amount to each town over the past few years.

The state has appealed the case to the Connecticut Supreme Court.

“Towns and cities have already included these aid commitments in their budgetary spending plans for this fiscal year,” Kevin Maloney, a spokesman for the Connecticut Conference of Municipalities, said.

“Although a $20 million cut was included in the budget that passed (the cut was meant to be offset by state mandate relief that never materialized), the new $30 million cut in LoCIP funds goes far beyond cuts called for the in the state budget,” Maloney said. “These cuts occur when towns have relied on agreements with the state regarding ways to address crumbling roads and bridges and other citizen safety projects.  The infrastructure cuts will impact the most distressed of distressed communities like Bridgeport, Hartford and New Haven.”

Maloney added: “The education cuts occur at a time when the CCJEF v. Rell case has proven that the state has serious education disparity issues to address.”

Republican legislative leaders didn’t question Barnes’ ability to make the cuts, but questioned the wisdom of the decision.

“The administration has known since August that they would need to hold back these funds from municipalities,” Senate Republican Leader Len Fasano, R-North Haven, said. “But they chose to wait until now to let towns know how much they would lose, after half the fiscal year has already gone by, making these cuts more difficult for towns to absorb.”

He added: “This is poor planning at best, and at worst appears to be an attempt to bury bad news when people are focused on the holiday season.”

House Minority Leader Themis Klarides, R-Derby, was also critical of the timing. She said they knew the education funding cuts were coming, but didn’t know when the budget axe would fall.

However, as far as funding for local construction is concerned, “Had they been revealed six months ago it might have allowed our towns and cities to better plan, not six weeks after the election and just days before the start of the legislative session,” Klarides said.