Christine Stuart photo

With the fiscal year ending Tuesday and no state budget agreement between Republican Gov. M. Jodi Rell and legislative leaders, local elected officials gathered at the state Capitol to express their concerns about what the future may hold for cities and towns.

“Tomorrow we start putting our local tax dollars at risk,” New Haven Mayor John DeStefano said Tuesday.

He said the failure of the governor and legislature to reach a deal means the $7 to $10 million a month New Haven spends on school construction may be at risk because the state will be unable to make progress payments.

“Starting tomorrow we’re on our nickel,” DeStefano said. “Our choice is to stop construction at our schools, which would put about 400 workers out of work… or basically take the risk.”

DeStefano said New Haven has chosen the later and will bond $30 million to cover the construction costs until the state has a budget in place.

“I can’t shut these jobs down,” DeStefano said.

In 2003 with no budget in place former Gov. John G. Rowland exercised his executive authority to continue state spending for certain services. When the legislature and governor finalized a budget agreement cities and towns were reimbursed for the interest incurred on local school construction bonds,  Jim Finley, executive director of the Connecticut Conference of Municipalities, said.

Finley said he suspects the same will happen this year.

Anything that relies on state bonding, such as school construction, will not be paid for through an executive order, Finley said. He said the Connecticut Conference of Municipalities has received informal assurances from Rell’s office that municipal aid payments will be made through an executive order.

However, the executive order Rell signed Tuesday does not include funding for at least two municipal grant programs which traditionally receive payment in July. The first is Town Aid Road and the second is a payment to the Regional Educational Service Centers. But it does include funding for charter schools, which is one of the three municipal aid payments traditionally made in July.

“If municipal aid is cut further during the special session, it will clobber towns across the state, there will be more service cuts, more lay-offs, and higher property taxes—maybe even supplemental property tax bills,” Mansfield Mayor Betsy Paterson said.

In a press release sent out following the signing of her executive order Tuesday Rell said the executive order ensures that state government will continue to operate.

“First and foremost, people should rest assured that state government will continue to operate – services will be delivered; we will care for the vulnerable and the sick; public safety and public health will be protected,” Rell said.  “Negotiations between my Administration and legislative leaders from both the Republican and Democratic caucuses are continuing.”

Rell said she will issue another executive order in August if no budget deal is reached before the end of July.

As legislative leaders prepare for the third day of budget negotiations, none were willing to comment on how the negotiations were going except to say they will be meeting again Wednesday.