The Middletown Press (Middletown, CT)
With no budget, executive order prevails
Impasse could lead to cuts in municipal aid to many towns
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.”