A spokesman for the biggest municipal lobby said Monday that he doesn’t expect a proposal to eliminate the car tax this year, but it would be nice if lawmakers decided to distribute some excess revenue to cities and towns.
The Connecticut Conference of Municipalities “is calling on the General Assembly to maintain and if possible expand state aid commitment to cities and towns,” Kevin Maloney, a spokesman for the group, said Monday.
If there’s an opportunity to do more with about $940 million in excess revenues reported this month by budget analysts, then Maloney said he would like to see the money applied to the PILOT [Payment-in-lieu-of-Taxes] program or additional education aid.
Last year, Gov. Dannel P. Malloy level-funded the Education Cost Sharing grant, which is typically the biggest grant cities and towns receive from the state. However, municipalities have argued for years that the formula is underfunded to the tune of more than $1 billion.
The Connecticut Conference of Municipalities is calling for an increase in the ECS foundation level to reflect the actual cost of educating students. It also wants the legislature to phase in full funding of the formula over a period of time. Some members of the municipal organization are calling for these changes to be made through a landmark school funding lawsuit expected to go to trial later this year.
Malloy may have appeased municipalities last year by level-funding education, but he also disappointed local elected officials by proposing to eliminate the local car tax, which brings in about $700 million in revenue to municipalities.
House Speaker Brendan Sharkey later proposed phasing out the current system where cities and towns charge different mill rates and replacing it with a statewide car tax, but there wasn’t enough support in the Senate for the idea and it died.
In the meantime, Sharkey’s Municipal Opportunities and Regional Efficiencies Task Force has been meeting to discuss ways it can lower property taxes by regionalizing certain programs and services. They are expected to wrap up their work before the end of February.
But Maloney said he doesn’t expect a proposal to eliminate the local car tax this year.
He said local elected officials are calling on the legislature to postpone debate over eliminating the car tax until the Department of Revenue Services finishes its tax incidence study. The study is expected to be released in December 2014.
“We’re hearing overall what’s being provided to towns will be protected,” Maloney said. “But we haven’t seen the governor’s budget.”
Malloy will unveil his budget on Feb. 5.
During the first few weeks of the legislative session CCM is hoping the state will send the $12.7 million in last quarter payments to the Municipal Revenue Sharing Account to the cities and towns. The state budget last year inadvertently cut the program short before making the last payment.
“We have a commitment that last payment will be made, hopefully, in the first few weeks of the session,” Maloney said.
He said cities and towns also would like to see that program restored because it was one of the few unrestricted pots of money municipalities receive. The money for the grant program came from the 2011 increase in the state sales tax. It was reclaimed by the state in an effort to balance the 2013 budget.
“CCM urges the governor and the General assembly to stay the right course and continue to avoid balancing the state budget on the backs of municipalities and their property taxpayers,” Ron Thomas, CCM’s director of public policy and advocacy, said.
CCM represents 156 cities and towns.
Malloy declined to comment directly on what municipalities can expect in his budget adjustment, but he talked generally about how he goes about the process of budgeting.
Starting with his first budget, which increased taxes and asked for concessions from state employees, Malloy said Monday that he “required shared sacrifice.” But since that time things have started to turn around and those constituencies that sacrificed during those first two years, should maybe see some relief.
“We’re perhaps turning a corner and seeing some growth,” Malloy said. “Those who have sacrificed, their needs need to be taken into consideration in light of where we are. But I’ll speak to that in more specific terms in the coming days.”
