State spending on municipalities accounts for about 14.2 percent of the state budget, so with the state facing a $1.3 billion deficit next year, the largest municipal lobby is warning that now is the wrong time to slash funding to towns.
In a document released Monday, the Connecticut Conference of Municipalities called for the state to maintain current funding levels to towns, relieve municipalities of state mandates, and to reform its education finance system. CCM also asked the state to encourage more regional cooperation among towns.
Jim Finley, CCM’s executive director, said municipalities are struggling to survive in the stalled economy.
“Municipalities across our state provide the public services that matter most to our people and businesses,” Finley said. “The state has made considerable efforts over the past two years to help municipalities stay afloat during the most challenging fiscal time since the Great Depression. Connecticut residents and businesses would be hurt badly if such investments were withdrawn.”
During his first two years in office, Gov. Dannel P. Malloy — a former mayor of Stamford — has avoided shifting the state’s budgetary burden onto municipalities.
This year, the municipal lobby asked the state for additional resources in some areas. For instance, it asked the state to increase its funding to the Education Cost Sharing grant. In its document, CCM said the state should modify the formula it uses to calculate how much funding towns get so it adequately reflects the actual cost of education.
Finley said that education costs make up an increasingly large portion of local governments’ budgets.
“Right now 62 cents out of every property tax dollar goes to pre-K through 12 education,” he said.
As a result, towns find themselves shrinking the resources they would normally divert to other town programs.
When Malloy first took office in 2011, his first two-year budget held towns harmless for the loss of federal stimulus funds that helped prop up the state’s share of the Education Cost Sharing grant. The ECS grant is the largest portion of revenue for most local budgets. Last year, Malloy added $50 million to the grant and formed a task force to come up with a better way of calculating how much municipalities receive from the state for education funding.
Last week, the task force issued its recommendations and proposed increasing funding to the ECS grant and phasing the new funds in over a four-year period. CCM released a statement praising the group’s work, saying the final report reflected many of the municipal lobby’s criticisms of the funding formula.
Given the current budgetary climate, Finley acknowledged it would be difficult for the state to add money to the ECS grant this year. But he said the legislature should take action on reforming the formula and then commit to fully funding the new formula over a period of a few years.
Dianne Kaplan deVries, who leads a coalition of 55 municipalities suing the state over what it says is “inadequate funding” said last week that the task force worked backwards from a fixed amount “with no consideration for what it really costs to do what schools need to be doing.” She argues the formula that the task force created does nothing to get at the chronic underfunding issues.
Malloy, who was once a plaintiff in the lawsuit, has done what he can to increase the amount of money going toward education.
Last year, under Malloy’s budget, 130 municipalities saw their ECS grants increase, while 39 towns saw theirs remain the same and no municipality saw their funding decrease.
CCM’s legislative priorities also called upon the state to provide greater assistance to towns for funding special education programs. Finley said special education costs in Connecticut are now over a billion dollars, of which the state funds only a small percentage.
Currently, in order for the state to step in and assist a municipality with special education costs, the town must be spending 4.5 times on a special education student than it does on its average per pupil cost. After that, the state will begin partially funding that student’s education. Finley said CCM would like to see that threshold lowered to 2 or 2.5 times the average per pupil cost.
Easing up on state mandates is another area the municipal lobby wants to see lawmakers focus this year. By CCM’s count, there are currently 1,200 state mandates, most of which are not subsidized by the state.
“They burden residential and business property taxpayers with significant costs and siphon precious resources from local services,” the document said.
One suggestion called for a constitutional amendment that would require the General Assembly to pass unfunded or underfunded mandates by a two-thirds majority. The group also asked that the state allow municipalities to defer property revaluations. Another suggestion asks that towns be allowed to post the availability of legal notices on their websites rather than the current requirement that they publish them in newspapers.
