Over 60 Towns & Cities Respond to CCM Survey Illustrating Service & Fiscal Constraints Imposed On Local Governments As New Fiscal Year Begins Amidst Continuing State Budget Impasse

Over 60 Towns & Cities Respond to CCM Survey Illustrating Service & Fiscal Constraints Imposed On Local Governments As New Fiscal Year Begins Amidst Continuing State Budget Impasse

Monday, July 24, 2017

Contact: Kevin Maloney, (203) 710-3486

The Connecticut Conference of Municipalities (CCM) today (Monday, July 24) released the results of a survey of town and city governments, which show the service and fiscal constraints being imposed at the local level as municipalities are forced to begin the first quarter of the new fiscal year with no indication regarding the final state aid level for this fiscal year.

“These survey results present a snapshot of the stresses on local government as they attempt to start their fiscal year, with little or no direction from the State regarding the level of state aid they will receive, never mind the level of state aid they need,” said Joe DeLong, CCM Executive Director. “As you can see, with the looming state budget crisis this spring and summer, towns and cities moved to cut spending and limit tax hikes as they feared a significant reduction in municipal aid.”

“And the specter of towns and cities needing to reopen their local budgets to adjust for significant cuts in state aid that could result from a final state budget agreement has created an unprecedented local-budget situation among municipal leaders ─ who pride themselves on responsible fiscal management and balanced local budgets year in and year out,” noted DeLong.

Here is an overall evaluation regarding each question and samples of the individual responses for each question.

Has your local government frozen its municipal spending partially or wholly until the impasse is resolved and your state aid has been determined?

Nearly half of the towns (29 of the 61 communities) have imposed some type or level of spending freeze during the first quarter of the fiscal year. For example:

  • Freezing capital budget spending funded through town’s General Fund
  • Holding on spending for police cars and public works equipment
  • Implementing city-wide hiring freeze
  • Slowing the hiring process where at all feasible
  • Freezing all department budgets with only contractual and emergency spending authorization
  • Funding only work projects that support core services and essential work performed over summer months
  • Placing a hold on virtually all discretionary spending
  • Postponing planned road work due to uncertainties of Town Aid Road (TAR) funds
  • Not implementing planned road construction spending

What municipal services have you been forced to reduce, or curtail as a result of the state budget crisis, with the start of the new fiscal year?

Again, nearly half of the responding towns (28 of the 61 communities) have already started to curtail some municipal services. For example:

  • Reducing education expenditures
  • Cutting police overtime and part-time hours
  • Delaying public works hiring after retirements
  • Holding on paving local streets
  • Eliminating summer youth programs
  • Reducing employee raises
  • Reducing library services and cutting back library hours
  • Cutting parks and recreation services
  • Cutting back on environmental testing
  • Eliminating positions at the board of education

 

Changes in municipal budget, mill rates and more back to top

In the absence of a state budget and final state aid allotments, how much did your approved local government budget spending increase (by dollar increase and percentage) compared to last fiscal year?

The average percentage increase in approved and proposed local government budgets among the 59 responding towns was only 1.52 percent. Recognizing that once a state budget agreement is reached, with final state aid numbers, local budgets in many cases may need to be adjusted (state legislation allowing for such action is expected to be included in the final state budget agreement) and this percentage figure may well change.

  • The increases range from 0.6 percent to 6.0 percent.

In the absence of a state budget and final state aid allotments, how has your property tax mill rate changed (by number of mills and percentage) compared to last fiscal year?

The average percentage increase in approved and proposed local government mill rates among the 59 responding towns was 2.86 percent. Again, recognizing that once a state budget agreement is reached, with final state aid numbers, local budgets in many cases may need to be adjusted (state legislation allowing for such action is expected to be included in the final state budget agreement) and this percentage figure may well change.

  • The percentage increases in the mill rates range from 0.8 percent to 9.39 percent. 

Has your board of education budget increased, remained flat, or been reduced as a result of the state budget impasse (by dollar amount and percentage change)?

Of the 52 municipalities who answered this question, the education budget increased in 37 communities, while nine municipalities saw no increase in their education budget and the education budget in seven towns were cut below FY 2016-17 levels.

  • The average percentage increase in education budgets was 1.37 percent.

The percentage increases in education budgets range from 0.3 percent to 4.5 percent. (It should be noted that, under current statutes, municipal governments have little or no line-item control over education spending.)

Do you support or oppose removing the mill rate tax cap on automobiles? If you are opposed to removing the mill rate car tax cap, would you be willing to mitigate the state’s budget deficit by raising the mill rate car tax cap above the current rate of 37? If yes, what mill rate would you be willing to raise the car tax cap to?

Of the 49 municipalities that responded to these questions, 38 supported removing the car tax cap and 11 opposed removing it; of that 11, three respondents said they would be willing to raise the mill rate car-tax cap above 37 mills; and lastly, when asked what mill rate should the car-tax cap be raised to, those three respondents said 40 or 42 mills.