As he travels the state defending and selling his budget proposal, Gov. Dannel P. Malloy is admitting his revenue package may not be perfect.
A decision to eliminate state funding for property taxes on manufacturing equipment municipalities are unable to collect has given Malloy and his administration pause in what seems like a whirlwind campaign to garner support for his budget.
In East Hartford, one of the 23 municipalities that would lose money because of the proposal, Malloy said he wasn’t ready to say his revenue package is perfect. He spoke at the East Hartford Chamber of Commerce’s annual meeting which was held in the Pratt & Whitney Museum.
“We probably need to make some adjustments and that’s what the legislative process is for,“ Malloy said. “It’s not perfect.”
He said he agrees there’s a disproportionate impact with the elimination of the manufacturing machinery and equipment funding, but he said the town would have been a lot worse if the state hadn’t fully funded the Education Cost Sharing grant. He said when he knows what all the adjustments are that may need to be made then they’ll be able to reach a solution to make East Hartford and the 22 other cities and towns whole.
“We pledge to work with you. We acknowledge that it’s something that should be addressed,” Malloy told the East Hartford Chamber of Commerce Thursday evening. “But I can’t address it until I know everything that people are saying has to be addressed.”
He said “you don’t want me negotiating against this budget,” because “this budget is the best budget that’s going to come out of the legislature and the sooner we get it done the better it‘s going to be.”
Malloy said he tells legislators that “you touch it too much, you own it.” The comment received a round of applause from the group.
East Hartford lawmakers including Rep. Tim Larson, Rep. Henry Genga, and Sen. Gary LeBeau met Wednesday with Malloy’s Budget Director Ben Barnes who solicited ideas from them about how to solve the problem.
Larson said East Hartford Finance Director Michael Walsh has suggested taking the first $14 million the towns collect from the sales tax and redistributing it to the impacted towns until the 23 impacted towns are held harmless.
The total cut for the 23 cities and towns amounts to $44.2 million. Towns which aren’t impacted by the loss of that funding are able to make up for the lost revenue with other alternatives such as boat and aircraft taxes, a local retail sales tax, room occupancy, and real estate conveyance taxes.
Most of the cities and towns impact by the loss of the manufacturing machinery and equipment have an industrial base such as a Pratt & Whitney or Sikorsky.
While Larson and newly appointed East Hartford Mayor Marcia Leclerc said they appreciate Malloy’s comments and are confident he’s willing to work with them to come up with a solution.
However, LeBeau, who helped write the manufacturing machinery and equipment legislation remains concerned.
He said the alternative formula Malloy is proposing creates distinct “winners and losers.”
“No town should be gaining, while others are losing,“ he said Thursday. “It’s unfair.”
“There are 23 towns that would see a net revenue loss under this formula while everyone else benefits. That is disproportionate,” LeBeau said. “I would say to those towns that are scheduled to see a gain, do not count your chickens before they hatch.”
East Hartford isn’t the only town that loses under Malloy’s proposal. Other affected municipalities include: Stratford ($2.8 million); Bristol ($2 million); Bloomfield ($1.4 million); Middletown ($1.6 million); Windsor Locks ($1.5 million); Waterbury ($2 million); New Britain ($1.2 million); South Windsor ($1 million); Wallingford ($1.6 million); and Windsor ($1 million).