Town leaders prepare for possible reductions to municipal aid

By Melanie Savage - Staff Writer
Region - posted Tue., May. 10, 2011
Gov. Dannel Malloy addresses the crowd during one of his town meetings concerning the budget. File photo by Melanie Savage.
Gov. Dannel Malloy addresses the crowd during one of his town meetings concerning the budget. File photo by Melanie Savage.

On Tuesday, May 10, Gov. Dannel Malloy issued a press release admitting defeat in negotiating an agreement with state employee unions. “After more than two months of talks,” it read, “I’m afraid that my administration and the state employee unions have not reached [an] agreement.” In order to realize $1 billion in savings for FY 2011-12, said Malloy, it would be necessary to begin layoffs of 4,742 state employees. “Those layoffs will result in savings of approximately $455 million,” said Malloy.

That leaves $545 million in savings that must come from elsewhere, and Connecticut’s local leaders fear that might mean cuts to municipal aid. In mid-April, Malloy released a list representing a one-third reduction in state aid to municipalities. At the time, Malloy’s senior adviser, Ray Occhiogrosso, claimed that the list did not represent the governor’s contingency plan. The list, said Occhiogrosso, was simply a reaction to constituents’ frequent referrals to New York Gov. Andrew M. Cuomo’s “no-tax increase” budget proposal. During his “Town Hall” visits to Connecticut’s towns, said Occhiogrosso, Malloy was frequently asked, “Why can’t you produce a budget like Cuomo’s?”

Because, came the answer, a similar scenario in Connecticut would mean that large cities like Hartford would lose $86 million, while smaller towns like Griswold would lose $4 million. At the time, Occhigrosso reassured that, absent a union deal, the full $1 billion would not come from the $2.8 billion in state funding that currently goes to Connecticut’s cities and towns.

But with the governor and the unions unable to come to an agreement, it looks like some reductions to municipal aid are inevitable. The question is, how much of a hit will Connecticut’s municipalities be expected to take? Naturally, local municipal leaders are concerned.

In Franklin, First Selectman Rich Matters said that the town currently receives approximately $914,000 in total from the state. “We don’t know exactly how much each town would lose,” said Matters. “If they cut $500,000 or $600,000, it’s two or three mil that we’d have to come up with.”

Franklin has yet to hold a vote on its proposed budget. “We went in very bare bones,” said Matters. “School funding is flat. We’re kind of stuck. We’re very concerned.”

In Hebron, the budget has been approved by referendum. “We will have set the mil rate by the time the state figures out what to do if they don’t get concessions,” said Board of Selectmen Chair Jeff Watt. “They have already sent information indicating it would impact Hebron$2.5 million. I see no alternative for the town but to make reductions at the town level to make up for what the state should be doing.”

Hebron Democratic Town Committee Chair Bill Rudis said he had concerns regarding the state budget that he planned to address in detail via a letter to the editor. However, he did express concern regarding the latest news from Hartford. “Basically we’re concerned that Hebron, along with a lot of other towns, relies upon state funding to implement many programs that the community relies upon,” said Rudis. With an increasingly heavy burden on municipalities, “It’s a precarious situation,” he said.

“The state budget should never have been passed in the first place,” said Hebron Republican Town Committee Chair Donna McCalla. “The governor’s budget is required by law to be a ‘balanced budget,’ but it was never a ‘balanced budget.’ It was a budget that had built in $2 billion dollars in pipe dreams - making an assumption that unions were going to ante up that kind of money. Now that’s about the biggest pipe dream you can have, but hey, the people elected him, and now all of us have to pay for his pipe dreams,” said McCalla.

In Columbia, “We estimate that we might lose $.5 million in the worst scenario,” First Selectman Carmen Vance said on May 10. “There are several options. We can begin to cut services, we can take the money out of our undesignated fund balance, or we can issue supplemental tax bills. Columbia meets tonight to vote on a no tax increase budget. If there has to be a change after tonight, then FIPAC, the Board of Education, and the selectmen will have to have a discussion on how to go forward.”

Lebanon, which also faced a budget referendum on May 10, was already working with a bare bones budget. “This is the third year in a row that we’ve had very lean budgets for both town government and the schools,” said First Selectman Joyce Okonuk. Lebanon was looking to pass a general town budget with a 0.9-percent reduction from fiscal year 2010-11, and an education budget representing a 1.5-percent increase. “What’s hurting us is a 7.36-percent loss in revenue,” said Okonuk. The town was looking at a .7 mil increase with a “yes” vote at referendum. “If reductions from the state are significant, it would have to be some combination of both an increase in taxes and further cuts,” said Okonuk.

Okonuk brought up another gray area regarding Malloy’s handling of the state budget. With towns in so many different points of the budget-making process, what would be the procedure for handling additional decreases in revenue? “It is extremely important that legislators put language in the bill that allows both the town and the school budget to be reopened, if it has already been passed,” she said. But bottom line, “Any further cuts by the state would be truly devastating for both the school and the town budgets,” said Okonuk.

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