Municipal leaders from the Connecticut Conference of Municipalities Tuesday renewed their call for the state legislature to scrap the municipal spending cap.
Under the cap, to qualify for state funds cities and towns can’t increase their spending by more than 2.5 percent.
Based on legislation passed within the 2015 state budget, beginning in fiscal year 2018 the Office of Policy and Management must reduce revenue sharing grants for those towns whose spending, with limited exceptions, exceeds 2.5 percent or more or the rate of inflation, whichever is greater. The penalty for exceeding the cap is a reduction in the revenue sharing grant of 50 cents for every dollar the municipality spends over the cap.
Calling the cap and its penalty a “financial disaster that is completely unworkable,” Mark Boughton, mayor of Danbury and president of CCM, said, “We are asking the legislature to repeal it” and he added that the “legislature should be spending time on getting its own budgetary house in order before lecturing us on ours.”
Boughton said CCM is well aware of the state’s budget crisis “and this isn’t a case where we are looking for more money for ourselves. We are just looking to have a real conversation about what the budget priorities are.
“The spending cap is wreaking havoc with municipal budgets,” said Boughton, who said he thinks the new faces in the General Assembly following the Nov. 8 election will give the spending cap issue a chance for more discussion.
“I’m optimistic and hopeful that we can have new conversations with state leaders about it,” said Boughton.
CCM, which represents 162 towns and cities in the state, held a press conference at Foxwoods Resort, site of the organization’s annual convention, to reiterate a message that it’s sent before — that it doesn’t like the spending cap legislation.
Susan Bransfield, First Selectwoman of Portland and 1st vice president of CCM, said the spending cap allows the “state to take over local authority” when it comes to setting budget priorities for a town.
The spending cap plan was passed in 2015, and was described by its Democratic backers as a revenue-sharing plan.
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, set aside an additional $46 million to change the funding formula for tax-exempt properties and allocated $185 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.
Looney said the spending cap was implemented to protect taxpayers and create accountability to ensure the new funding is spent wisely.
“Some local leaders may have a misimpression of what the ‘spending cap’ really is,” Looney said. “It applies only to new state aid and does not prevent towns in any way from spending however much money they see fit. These reforms will bring stability and sustainability to our state and our municipalities, and most importantly: property tax relief for taxpayers across Connecticut.”
Rep. Jason Rojas, D-East Hartford, said there’s always room to modify the proposal, but he doesn’t think scrapping it is what taxpayers want. He said on the campaign trail lawmakers heard a lot about the “unsustainable” property tax burden and this is an opportunity for the state to provide new revenue to cities and towns.
“Any time there’s a new law there’s a period of adjustment,” Rojas said Tuesday.
CCM leaders said while sharing in revenue might sound fine when first heard, it doesn’t mean much when other municipal grants are cut as much as the revenue sharing money to make up for the overall state budget deficit.
Bransfield noted that in many towns budgets are approved at town meetings or referendums and that the spending cap takes budget-making priorities away from the residents of a particular town.
While it was mostly CCM officials who were critical of the spending cap law at Tuesday’s press conference, there were other officials who also expressed their support for CCM’s position.
Joseph Cirasuolo, executive director of the Connecticut Association of Public School Superintendents, called the spending cap a solution to a nonexistent problem.
“They (state officials) keep adding unfunded mandates,” Cirasuolo said, “to the point where we now have a budget that is weighted toward meeting state mandates.”
CCM Executive Director Joe DeLong, who has been sharply critical of the spending cap plan in the past, said he thinks the recently concluded General Assembly election may give talks between his organization and legislative leaders a better path to finding consensus.
“There is a new legislative opportunity to create a more transparent policy,” DeLong said. “We want to be at the table to discuss these matters with legislators.”