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Connecticut Towns Mull Shrinking Fiscal Options As They Wait For State Budget

Connecticut Towns Mull Shrinking Fiscal Options As They Wait For State Budget

Connecticut Public Radio, August 9, 2017

By Harriet Jones

Connecticut seems no closer to a budget deal despite the adoption of a new labor concessions package. Meanwhile, the state’s towns and cities are still having to pay their bills.

The start of school is just a couple of weeks away for most districts, and many had to adopt their own budgets around May of this year.

Betsy Gara, executive director of the Connecticut Council of Small Towns, told WNPR’s Where We Live  the situation is unprecedented.

“In the past, when we’ve had budget negotiations that have dragged on, the level of municipal aid was never in question,” she said. “But now we’re told, brace yourselves, municipal aid is on the chopping block – and we’re trying to scramble.”

That includes the uncertainty of how Governor Dannel Malloy might adjust aid for schools as he runs the state under executive order -- something he announced last week.

Losing more than half of state aid back to top

The town of Coventry is looking at losing two-thirds of its state funding, and town manager John Elsessar said that’s the equivalent of raising the town’s tax rate by nine mills.

“The parties are up there -- some are saying we don’t want any tax increase,” he said. “Well, property taxes are taxes. It’s kind of naïve to think they’re going to cut that kind of money and not have a property tax increase.”

New London should be one of the places that benefits from the governor’s plan to redistribute education aid. But it’s still adopted a budget that assumes the loss of $2.5 million in state money – and implemented a nine percent hike in property taxes.

Mayor Michael Passero said the state exemption of nonprofit and educational properties means his city has very few options.

“That is the way the state has set us up to fail,” he said, “permitting so many properties to go off the tax rolls and then not reimbursing us for that. The state’s generosity is costing the taxpayers of New London dearly.”

The Connecticut Conference of Municipalities says the increasing reliance on property taxes is contributing to the state’s fiscal downward spiral by chilling future economic development in high tax towns. It has made an alternative proposal that would involve hiking the sales tax, and diverting the extra revenue directly to municipal aid.