Some win, some lose in state aid allotments
Connecticut Post, May 22, 2016
By Ken Dixon
For a tough fiscal year marked by sharply reduced tax revenues and more than $860 million in spending cuts, Bridgeport did pretty well in the budget set to take effect July 1, with $14.7 million more in state aid coming than the city received in 2015-16.
Milford is on track for $1.6 million more in the budget that awaits Gov. Dannel P. Malloy’s signature; Trumbull, $1 million; and Shelton, nearly $1.3 million. More affluent towns, however, will likely have to radically rethink their budget plans or raise local property taxes to cover sharp reductions in state aid.
Fairfield would have to make up about $1.2 million and Westport more than $787,000, according to an analysis of the wide range of state aid conducted by the Connecticut Conference of Municipalities.
Fairfield First Selectman Michael Tetreau said the late budget adjustments make the problem even worse than it seems. “We still need to talk about specifics,” Tetreau said. “We have to go back and look at what items we can hold off on, such as the purchase of purchase of heavy equipment, sidewalk maintenance, possibly cutting back hours in departments.”
Back in February, when the projected budget deficit was much smaller and Malloy presented his first spending plan, Fairfield was slated to get $2.3 million more in aid than what was approved last week in the state House and Senate, Tetreau said. The town’s potential share of sales-tax revenue later fell from $1.1 million to about $800,000. Now, with the local school budget locked in,
Tetreau, a Democrat, is in negotiations with town department heads and the Board of Education in attempt to bridge the $2.3 million reduction to the current $7 million in state support. Fifty three of the state’s 169 towns and cities would see reduced levels of state aid under the new budget, including education, payments in lieu of taxes for tax-exempt properties, town road aid and municipal revenue sharing.
All state support for local school busing would be eliminated in the pending budget. Darien, Easton, Greenwich, New Canaan, Redding, Ridgefield, Weston and Wilton would all see reductions to current levels of aid.
Less is more back to top
But even the communities that would get more money will get less than they anticipated earlier in the year, before income-tax revenue fell off so badly that the second year of the biennial budget, set to start July 1, was nearly a billion dollars in the red.
Malloy’s original proposal would have given Bridgeport about $18 million more than the current $207 million in statutory grants.
Av Harris, communications director for Bridgeport Mayor Joe Ganim, said last week that the city’s delegation in the General Assembly worked hard to preserve local aid, which was dramatically changed last year when sales-tax revenue and a cap on local car taxes were enacted for local property tax relief.
“The state’s increased investment in cities like Bridgeport is very significant,” Harris said. “At the same time, Mayor Ganim and the city Council are now struggling to put together a budget in which we need to find an additional $4 million of savings more than we had anticipated in order to achieve balance by July 1st.”
In Shelton, officials are skeptical the state will provide as much as it claims. “That’s great,” said John Anglace, president of the Shelton Board of Alderman, “but we’re not counting on anything additional from the state. What we plugged into the budget is what we’re relying on.” Anglace said the state is promising so many “grandiose things,” he wonders how those promises can be fulfilled, with the growing deficit and lack of revenues.
“Companies are moving out of Connecticut constantly,” he said. “Where is this money going to come from?” If it does come, Anglace said, it will go into the General Fund and replace money that was used to pay for the new roof on Sunnyside School.
Judy Szewczyk, head of Derby’s Board of Apportionment and Taxation, said town officials are still going over the numbers. “I don't know what the bottom line is yet,” Szewczyk said. “It will be great if the state is giving us more than anticipated from the estimated numbers.”
First Haircut back to top
Senate Majority Leader Bob Duff, D-Norwalk, said the challenges mounted up this year because of stock market volatility, the resulting fall off in income-tax revenue and the decade-long shift from higher-paying manufacturing jobs to lower-wage service employment. “This is the first time there has been a haircut, compared to all the other years where we have held communities harmless,” Duff said. “The Legislature has worked very hard to keep funding at levels so towns and cities did not lay off fire and police.”
House Minority Leader Themis Klarides, R-Derby, said it’s more than a coincidence that many of the towns hit hardest by this year’s budget cuts have local Republican leaders. “I don’t put anything past any of them, as far as playing politics in an election year,” Klarides said in an interview. “The overall problem is, once again, we’re doing a piecemeal budget. Is it better than others? Yes. But it’s certainly not changing anything for the future.”
Sharing services back to top
Joe DeLong, executive director of the Connecticut Conference of Municipalities, said that aid partnerships with the state need to work better. “I hate it when we get a system that, in order to balance budgets, you have to pick winners and losers,” DeLong said.
DeLong said that despite efforts by legislative leaders to support regionalism, particularly by Speaker of the House Brendan Sharkey, D-Hamden, there hasn’t been enough structural change. “If you’re asking municipalities to do more with less, you have to give us flexibility,” DeLong said, adding that towns can adopt their own efficiencies, such as combining back-office functions in town halls and local school boards.
Sharkey, while announcing last week that he would retire from the General Assembly, said the state’s fiscal future would remain endangered until more towns and cities cooperate and share services. “Every time that I attempted to use this financial crisis as a reason to make those changes at the local level, both on the municipal and the Board of Ed side at the local level, the pushback was overwhelming,” Sharkey said. “I’m hoping that as we go into this new reality, the new budget reality, the new fiscal reality of the state of Connecticut, that that resistance will continue to erode, and the folks at the local level will get it that this is not sustainable at the state or local level.”