The Middletown Press (Middletown, CT)

With no budget, executive order prevails

Impasse could lead to cuts in municipal aid to many towns

- By Ken Dixon

The governor’s executive order severely restrictin­g spending amid Connecticu­t’s prolonged fiscal crisis heads into its second quarter on Sunday, with no end in sight.

If the stalemate in the state Capitol continues to drag for more than a couple more weeks, about 80 wealthier towns will be shut out of expected levels of municipal aid and school funding.

Many are supporting Republican efforts to override Gov. Dannel P. Malloy’s veto of a predominan­tly GOP budget that passed two weeks ago with nominal support from a handful of Democrats. If that fails, and they are forced to pay a portion of their teacher pensions, the small-town leaders are considerin­g legal action.

“We’re not up here saying we don’t want any haircuts,” said Leo Paul Jr., Litchfield’s first selectman, Thursday in the Capitol, predicting he and other local leaders might have to suddenly send tax bills of another 10 percent or more to cover the lack of state help.

“We expect there’s going to be haircuts,” said Paul, president of the Connecticu­t Council of Small Towns, which brought about a dozen local leaders to the Capitol, piggybacki­ng on a podium just vacated by Malloy.

“But what we don’t expect and what we can’t live with is the sudden impact of 85 towns getting completely ‘zeroed out.’ That’s a direct impact to the taxes in the communitie­s. It may not be a state tax. It may not be a tax that’s levied down from the state itself, but it is a direct tax increase.”

He said the COST board of directors unanimousl­y supports legal action if they are forced to pay for teacher pensions, for which, historical­ly, the state has covered the employers’ share. In February, Malloy proposed shifting $400 million in those costs to the towns and cities. More recently, in budget negotiatio­ns, he has

reduced that proposal by half, phased in over two years.

‘We’re not whining’

Ridgefield First Selectman Rudy Marconi, a onetime Democratic gubernator­ial hopeful, said the bonds used to pay for pensions state towns and cities are not required to fund the obligation­s.

“And yet the governor is proposing that municipali­ties begin picking up a share without any voice in a pension (program) that needs an overhaul,” he said.

Marconi, whose town would receive none of the traditiona­l Education Cost Sharing payments under Malloy’s executive order, said he ignored a request earlier in the year from Malloy’s budget office asking where the Ridgefield’s fund balance stood.

“All that informatio­n is available publicly, and we’re not going to deplete our fund balance to satisfy any obligation that we don’t have a voice in,” Marconi said, stressing if towns were forced to dip into their savings, it would result in downgrades from the bond-rating agencies, then cost them higher interest rates to pay for capital projects.

“We’re not whining,” Marconi said. “We’re not complainin­g we’re being cut. This will have dire consequenc­es on our financial status. The state is a mess, but why pass it down to the municipali­ties?” First Selectman Michael J. Freda, of North Haven, agreed the local leaders are trying to avoid sending supplement­ary tax bills, sharply reducing local government and educationa­l services or borrowing from their fund balances.

“Anything that reverts back would cause us to do one of those three major things,” Freda said.

“The executive orders are not a budget,” Malloy said a few minutes earlier, as COST members stood nearby, behind TV cameras. “They are a temporary steps that we take to make sure that the state doesn’t spend money that it can’t reasonably predict to take in. But I’ll also tell you that if we lived by those executive orders, we could cut expenses significan­tly. I very much want a budget.”

 ?? Hearst Connecticu­t Media file photo ?? North Haven First Selectman Michael Freda says municipal leaders hope to avoid options such as issuing supplement­ary tax notices or steep cuts in services once a state budget is passed.
Hearst Connecticu­t Media file photo North Haven First Selectman Michael Freda says municipal leaders hope to avoid options such as issuing supplement­ary tax notices or steep cuts in services once a state budget is passed.

Newspapers in English

Newspapers from United States