Christine Stuart photo

(Updated: 4 p.m.) Local leaders from a handful of cities and towns gathered at the Legislative Office Building Monday morning to criticize Democratic leaders and Republican Gov. M. Jodi Rell for agreeing late last week to stick with the fiscal year 2009 $18.7 billion budget adopted last year.

Mayors and first selectmen from several cities and towns talked about what the legislature’s failure to act on the second year of the state’s two-year budget means to citizens across the state.

“Tax increases, lay-offs, and service reductions,” New Haven Mayor John DeStefano, Jr. said Monday summing up the local impact.

Foreclosures and property taxes are increasing and local services are decreasing, Stamford Mayor Dannel Malloy said describing the “tsunami effect” of the budget and economy.

Hartford Mayor Eddie Perez said he doesn’t know if he’ll be able to hire the 50 new fire fighters who recently graduated. “It’s not the time to pull back on cities and towns,” Perez said.

Malloy said the legislature and governor “slapped cities down,” by coming to this agreement after what he thought were “interesting” discussions about finding ways to fully fund, PILOT, payment-in-lieu of taxes.

The Democrat-controlled Finance, Revenue, and Bonding Committee proposed a 6 percent sales tax on deliveries as a way to fully fund PILOT. The proposal received a fair amount of criticism from couriers and businesses, but was supported by the Connecticut Conference of Municipalities.

Under the “do nothing” 2009 fiscal year budget, overall state aid to cities and towns will increase $69.6 million over fiscal year 2008. New Haven will receive a $4.2 million increase in state aid. Hartford will receive a $10.4 million increase in state aid, and Stamford will receive a decrease of $40,000 in state aid under the “do nothing” budget.

As far as PILOT is concerned, New Haven will lose $1.5 million, Stamford will lose about $785,472, and Hartford will gain $2.26 million under the 2009 fiscal year budget, according to the Connecticut Conference of Municipalities.

Short of substantially property tax reform, which is not likely to happen during the last three days of the legislative session municipal leaders are looking for places to cut.

Sal Luciano, executive director of AFSCME Council 4, said Monday that they are strongly urging local leaders to consider State Comptroller Nancy Wyman’s enhanced Municipal Employees Health Insurance Plan. The plan would pool municipal employees throughout the state and reduce health insurance costs in many cities and towns. He said health care costs, in the short-term, is where towns can save some money. He estimated some towns could save $100 million.

Click here to read about the union concessions DeStefano is seeking from his city’s 14 unions.

Local leaders said they would continue to lobby lawmakers until the session ends on May 7.

Meanwhile, Republican lawmakers will try to attach their budget proposal, which calls for 4,200 state employees to take early retirement, to any bill that has a fiscal note attached.