Courtesy of House Republican Web site

State Rep. Vincent J. Candelora, R-North Branford, says he thinks Gov. M. Jodi Rell’s proposal to cap local property taxes is not getting a fair shake at the capital or from the news media.

That’s because no one is discussing how Rell’s proposal ties into the binding arbitration process, says Candelora, a first term representative who sits on the Appropriations Committee.

Binding arbitration is the process through which towns generally are forced to include annual raises in the contracts of unionized employees – whose salaries make up the bulk of every municipal budget – no matter how poorly the economy is performing.

“At first I was 100 percent against it,” Candelora said Friday of the governor’s proposal. “But when you read what she’s tied into it, it has some merit. She’s effectively taking away the 3 to 3.5 percent guaranteed annual raises for town employees.”

Candelora said public employee salary and benefits far outweigh those in the private sector, and “that’s where the debate really should be on this tax cap issue. There’s definitely room for debate on the subject. My guess is it’s not getting a fair shake.”

Arbitrations so seldom end in favor of local taxpayers that East Hartford officials were stunned in October 2006 when a panel of three arbiters turned heads around the state by deciding not to award raises to the town’s unionized teachers. According to the Journal Inquirer’s online archive, the arbiters’ report continually mentioned the town’s inability to pay as a major factor in the decision, adding that the ruling would “move the salaries of the teachers somewhat more in line with the town’s limited financial capabilities.”

But the good news for taxpayers in that panel’s report ended after the first year of the contract. The panel still gave the teachers 2.75 percent and 3 percent raises – with step increases – in the final two years of the deal ending in 2009-10.

Arguably, the economy has gotten even worse since that decision. Candelora says that when public employees get 3 and 4 percent pay increases every year, eventually something’s got to give.

“There’s no mechanism in place to allow towns to give less than 3 percent,” he says. “In some cases it’s like we’re following each other off the cliff. When you’re in tough times and your grand list is not growing, towns can’t issue 4 percent raises.”

Candelora noted that he is aware of the Stodder study, a union-financed analysis of Rell’s plan conducted by Rensselaer Polytechnic Institute Economics Professor James Stodder and released this week. The study was critical of the cap proposal on many levels. Candelora said he disagrees with some of Stodder’s conclusions, but also that he isn’t surprised to see criticism of Rell’s plan from unions.

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Specifically, Candelora said Rell’s plan would not necessarily hurt large cities more than affluent suburbs – as Stodder concluded – because every municipality would have the ability to break the cap if they saw fit.

But the crucial pieces of Rell’s proposal, Candelora said, are in changes to the contract arbitration process, where he says towns have been at a disadvantage. By and large, arbiters have been awarding pay raises based on what other towns have paid, Candelora says, instead of considering what a town is able to pay like the panel did for East Hartford in October 2006.

Under Rell’s proposal, Candelora said, arbiters would not be allowed to award a contractual pay increase that violates the proposed tax cap. And, he said, arbiters would not be allowed to take into consideration a town’s rainy day fund.

“What her tax cap proposal does is it brings it back to the town’s ability to pay,” Candelora said. “It’s really a discipline tool.”

This isn’t the first time Rell’s proposed the cap, nor is it the first time she’s been criticized for it. Big city mayors in Connecticut took aim at a similar Rell proposal in April 2007. That was after she floated the cap idea in the weeks following a budget address in which she included an income tax hike to pay for a landmark increase in education funding.