A few hours before their first budget negotiating session with Gov. Dannel P. Malloy, legislative leaders rehashed what happened in December and got an earful from local officials unhappy with municipal aid formulas.
At a Council of Small Towns meeting in Rocky Hill Tuesday, Democratic and Republican leaders disagreed about what happened during budget negotiations in December and how helpful it was to dedicate half percent of the sales tax to municipalities.
House Speaker Brendan Sharkey, D-Hamden, said the General Assembly could have increased the prevailing wage threshold for municipal construction projects in December if Republicans hadn’t left the room.
“Prevailing wage was one of those things we could have done in December, if we had the Republicans still on the package and still willing to vote,” Sharkey said.
Prevailing wage frequently pits organized labor unions against municipalities. The unions believe the policy sets important wage standards for construction workers, and the municipalities view it as a burdensome unfunded mandate. Currently prevailing wage must be paid on new construction projects that cost $400,000 and renovations worth more than $100,000.
“It was something we were very actively considering and very interested in doing,” Sharkey said.
Senate Minority Leader Len Fasano, R-North Haven, said he doesn’t agree with Sharkey’s assessment. He said just because they didn’t agree with the budget mitigation doesn’t mean Republicans walked away from the table.
He said the state is in fiscal crisis and he’s not going to vote for a budget that doesn’t make “long-term structural changes,” such as allowing the General Assembly to vote on labor contracts.
Sharkey said they did adopt at least one of the Republican proposals to adopt a constitutional spending cap. The legislation more accurately created a commission to study the constitutional spending cap, an idea the governor embraced during his State of the State address earlier this month.
Republicans wanted everything they asked for and that’s not how compromise or negotiations work, Sharkey said.
Neither Sharkey nor House Minority Leader Themis Klarides, R-Derby, felt the dust up over the December budget negotiations would hinder their discussions Tuesday afternoon with Malloy regarding budget adjustments to fiscal year 2016 and 2017.
“I have a voodoo doll at my house for one of you, but I never put the pin in,” Klarides said.
Sharkey said he thinks Malloy called leaders from both parties together Tuesday to enable them to have a conversation from the very beginning. It’s only the third time during Malloy’s tenure that Republican lawmakers have been invited to the table.
Meanwhile, local officials are still upset about changes the General Assembly made last year.
Bolton First Selectman Robert Morra said he doesn’t like the 2.5 percent spending cap because it’s the legislature “telling us they know how to run our towns better than we do.”
In order to get some of the $109 million cities and towns can’t increase their spending more than 2.5 percent.
Senate President Martin Looney, D-New Haven, explained that last year they used a half percent of the sales tax to lower the mill rate on motor vehicles in 32 communities, set aside an additional $46 million to change the funding formula for tax exempt properties and allocated $109 million to a grant program for municipalities.
Looney said the 2.5 percent cap is a “soft cap” because municipalities are not barred from spending more than that. There are some exceptions to the 2.5 percent spending cap such as court orders, arbitration awards, debt service, disaster relief, and special education funding.
Sharkey said the notion was not to “dictate” or say that “we know best,” but the point was if the state is going to dedicate a revenue stream then the taxpayers want to see some measure of how that is going to get spent.
“This was not meant to be a dictatorial mandate,” Sharkey said.
Litchfield First Selectman Leo Paul said what the legislation does is remove the vote from the residents of the communities, which have Town Meeting forms of government. He said the legislative body of the town sometimes votes to increase spending for education or special projects and this 2.5 percent spending cap would limit their ability to spend. The grants will also be lowered to towns that spend more than 2.5 percent.
Sharkey said he doesn’t believe the taxpayers of Connecticut would be happy with dedicating a portion of their sales tax to cities and towns with no strings attached.
“It was very transformational what we did last year,” Sharkey said.