Two days before the start of the 2009 legislative session, local elected officials wanted to give state lawmakers a simple civics lesson.
“The state of Connecticut has a lot of choices as to how it can raise revenues,” New Haven Mayor John DeStefano Jr. said at a Capitol press conference . “Cities and towns do not have those choices. We have two sources of revenue: property taxes and state aid.”
“We’re looking for choices,” he said.
By choices, DeStefano and his colleagues from the Connecticut Conference of Municipalities said they want lawmakers to consider sharing sales tax revenue, give municipalities broader authority to impose user fees and fines, and delay unfunded mandates, such as in-school suspensions, raise the age legislation, and web-posting requirements. Local elected officials said they would also like to see the state defer property revaluations and help municipalities with regionalization efforts.
Last year the Finance, Revenue, and Bonding Committee thought it had found two innovative ways to help out municipalities.
The first was the creation of a delivery tax to fully fund the state’s payment in lieu of taxes grant, also known as PILOT, which helps pay for state properties and hospitals that are not subject to local property taxes. The second bill would have allowed municipalities to keep half of the 12 percent hotel tax levied by the state on tourists who occupy a hotel room for less than 30 days.
Both proposals died last year when the General Assembly and Gov. M. Jodi Rell agreed to stick with the two-year budget they had passed in 2007. Click here to see how much sales tax revenue municipalities expected in 2007 given three different scenarios spelled out in the graphic.
What makes DeStefano and his colleagues confident the measure will come up again this year?
“Cause their budget problems are so urgent, they’re going to have such a difficult time budgeting for themselves that I think they’re going to look at alternatives,” DeStefano said. “As they wrestle and grapple with what they’ve gotta do to close the budget, they’re going to look at some things they didn’t do before.”
The state is facing a $343 million budget deficit in 2009 and a more than $6 billion budget deficit in the two following years.
CCM has proposed increasing the state sales tax from 6 percent to 7 percent and sharing half of the increase on regional cooperation efforts. It has also proposed allowing these regions to levy their own regional sales and hotel taxes for infrastructure and economic development projects.
Hartford Mayor Eddie Perez said if the state fully funded PILOT and gave the Capitol City its $25 million that it would go a long way to helping solve the $34 million budget deficit.
Bridgeport Mayor Bill Finch said his city is running a $20 million budget deficit.
“Bridgeport is a couple blizzards away from bankruptcy,” Finch said.
Simsbury’s First Selectwoman Mary Glassman said cities and towns are in a bad position because, “We can’t come up here and ask the state for more money and we can’t go back to our communities and ask our taxpayers for more money.”
She said the difference between last year and this year is, “the intolerance of our property taxpayers to get a tax increase.” She said it’s even more urgent than before that state and local officials work together on this problem.
Unlike the federal government, local governments are required by law to balance their budgets.
James Finley, executive director of the Connecticut Conference of Municipalities, said local officials are also looking at regionalization efforts, which would not create a new layer of government but would allow the state’s 169 cities and towns to negotiate contracts on a regional basis through the 15 already established regional planning organizations. He said this would begin to equalize the salary and benefit levels of municipal employees on a regional basis.
CCM is also calling for legislation which would allow labor contracts in municipalities that meet a certain threshold of fiscal distress to automatically be reopened.
Why not call for changes to the state’s binding arbitration law?
“We’re looking at things that are realistic,” Finley said.
Local officials also asked the state not to cut state aid programs, such as the Education Cost Sharing, Town Aid Road, or PILOT.
Click here to read the post on this press conference from The Real Hartford blog.