Christine Stuart / ctnewsjunkie
Gov. Dannel P. Malloy (Christine Stuart / ctnewsjunkie)

HARTFORD, CT — Gov. Dannel P. Malloy used his state-of-the-state address Wednesday to set the stage for changes in how the state distributes municipal aid, primarily in education funding.

The state provides a total of $5.1 billion in municipal assistance, which Malloy said is more than one fifth of Connecticut’s overall budget this year, “making it our biggest single expense — not state employee pensions, not Medicaid, not debt service, not salary and benefits of our employees; town aid accounts for the largest portion of our state budget.”

Of that $5.1 billion, “81 percent of that — or $4.1 billion — is educational funding,” Malloy said. “That doesn’t include school construction financing, which accounts for approximately one quarter of Connecticut’s bonded debt.”

For the past six years, Malloy has largely left municipal aid untouched, but just last month his budget office announced it was cutting $20 million in education funding to municipalities and eliminating $30 million in funds for local construction projects.

However, those stop-gap measures won’t solve the $1.5 billion budget deficit he has to resolve when he gives his budget address in February.

Malloy said the state should be spending lots of money on education funding, but “the question is, in a time of scarce state resources, are we spending this money in the best way possible? Are we ensuring that all students, regardless of the life circumstances into which they are born, regardless of what town or city they live in — can receive a quality public education?”

In answering his own question, Malloy said he doesn’t believe “we are meeting that standard.”

He said a recent court decision against the state says that as well.

Malloy was referring to a September decision in which a superior court judge mandated that the state resolve disparities and shortcomings in education funding, teacher evaluations, high school graduation requirements, and a handful of other policies. Attorney General George Jepsen, whose eyes got wider Wednesday when the governor seemed to agree with at least part of the judge’s decision, has appealed the case to the Supreme Court. Malloy, who was once a plaintiff in the case as Stamford’s mayor, was encouraged to settle the lawsuit before it went to trial last year.

Meanwhile, when it comes to municipal aid, Malloy said the state doesn’t currently have a formula that appropriately measures “a given community’s burden. A formula that recognizes specific challenges faced by local property taxpayers. And a formula that takes into account the impact those challenges have on the education provided to our children.”

Christine Stuart / ctnewsjunkie
Sens. Martin Looney and Len Fasano listening to Malloy’s speech (Christine Stuart / ctnewsjunkie)

He said he will present a budget that will outline a “more equitable system for providing town aid.”

“The system will be designed to be more fair, transparent, accountable, and adaptable — meaning that it will provide flexibility to fit the needs of a given community,” Malloy said. “The result will be a fairer distribution of our state’s limited funds.”

Lawmakers on both sides of the aisle applauded the idea, but said the devil will be in the details.

House Speaker Joe Aresimowicz, D-Berlin, said there are 169 communities and 151 lawmakers in the House who are accustomed to getting the money their communities have been getting for years, so he said any changes to that system will require some “flexibility.”

“We can’t continue to have 169 municipalities with their own superintendent of schools, their own police dispatch centers, their own animal control facilities. That is just not a proper use of taxpayers money,” Aresimowicz said.

But Aresimowicz said instead of a carrot, municipalities are going to be given a “stick” if they want to continue to receive state funds.

“If you’re going to go it alone, you’re going to have to come up with the money to do that,” Aresimowicz added.

House Minority Leader Themis Klarides, R-Derby, said the legislature can’t withhold money from municipalities and then require them to do more.

“You can’t talk out of both sides of your mouth,” Klarides said. “Yet, we’re still going to give you all of these mandates you can’t afford.”

Joseph DeLong, executive director of the Connecticut Conference of Municipalities, said they don’t believe education funding should be considered “municipal aid.”

“Education is the state’s responsibility,” DeLong said. “Having said that, we are more than willing to work with the state to find a fair and equitable funding formula when it comes to education funding. The problem we have with the current funding allocations is they aren’t real. The numbers change — they aren’t predictable. We need to level the playing field.”

Malloy said if they are successful in coming up with an equitable funding formula for municipal aid, then “there will be an important ancillary benefit — we can help ensure that no Connecticut city or town will need to explore the avoidable path of bankruptcy.”

Christine Stuart / ctnewsjunkie
Hartford Mayor Luke Bronin (Christine Stuart / ctnewsjunkie)

Hartford Mayor Luke Bronin, who was in attendance, applauded the statement.

“The dual focus on fair funding that allows our cities to compete and stop fighting with one hand behind their back, coupled with accountability, is the message I’ve been pushing for many months,” Bronin, Malloy’s former chief legal counsel, said.

Bronin said he looks forward to seeing the details of Malloy’s proposal.

In the meantime, he appreciates the desire to make sure no city has to go down the “avoidable path of bankruptcy.”

Malloy joked that he knows whatever he proposes will be changed by the legislature. However, he told a joint session of the House and the Senate that he’s willing to partner with them for “real change.”

Jack Kramer contributed to this report.