We knew it would come to this. The only question was when and how much. Though he has hinted he might accept a tax increase if it was forced upon him, Gov. Dannel Malloy doesn’t want to propose one in anticipation of a projected $1.5 billion budget deficit next year.
And you can see why. Over the course of his two terms, Malloy has succeeded in getting his fellow Democrats in the legislature to go along with two of the largest tax increases in state history. But they’ve had little discernible effect. The state’s various taxing schemes are not generating the expected revenue, so we still have deficits as far as the eye can see.
Instead, Malloy has announced a back-door tax increase in the form of cutting aid to towns and cities, which is budgeted this year at $5.1 billion, 81 percent of which goes to local education. To his credit, over the last six years, Malloy has pretty much left municipal aid, which is very popular among voters, off the table when wielding the budget axe.
Now however, given his reluctance to push through yet another broad-based tax increase, Malloy is left with few good options that don’t include sticking it to the towns. Indeed, the governor has set the stage by insisting repeatedly that if cuts must be made, towns and cities are better positioned than the state to weather the storm financially. Really? Surely he couldn’t be talking about places like Hartford and Winsted, which have teetered on the edge of insolvency for years.
“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 at last week’s state-of-the-state address. “The result will be a fairer distribution of our state’s limited funds.”
That means the cuts will hit the state’s wealthiest communities the hardest, as they did at the end of December when his administration announced it would cut $30 million in local construction projects and $20 million in education funding. Cuts in the Educational Cost Sharing grants to the state’s largest and poorest school districts were capped at $250,000.
The mid-year budget cuts were announced in a letter to legislative leaders by Malloy budget chief Ben Barnes on Dec. 29 — in the thick of the holidays — which is sort of like announcing something in the middle of the night.
It goes without saying that this is not a very efficient way of cutting spending. Those towns and cities that spend the most see the fewest losses per student. Those that see the greatest percentage of the ECS grant cuts weren’t receiving very much to begin with.
To wit, Waterbury was slated to receive almost $133.9 million in ECS grants and will lose the maximum $250,000, about 2 percent of the total. Next door, wealthy and much smaller Middlebury will only see a cut of about $56,000, which is little more than a rounding error in a town with a budget of about $32 million. If the town has to raise taxes to make up the difference, it’s not something that’ll be felt by the average Middlebury taxpayer; yet if the town cuts budgets, someone will surely get pinched.
But in medium-sized towns, there will be a substantial impact. In Trumbull, home of Malloy’s potential opponent for re-election in 2018, Republican First Selectman Tim Herbst, Malloy wants to cut $266,792 in ECS grants and another $245,884 in cuts to capital improvement grants
I understand the need for more revenue but, like many who lean right on fiscal matters, I’d like to see the governor and General Assembly address structural issues and take on reforming state employee benefits and pensions, as well as making the state more competitive for businesses. After all, you can’t cut or tax your way out of a fiscal malaise. We must innovate and grow our way out. And we can’t do that in Connecticut’s current economic and regulatory environment.
That having been said, the optics of these aid reductions and their resulting tax increases or spending cuts are simply terrible. At a middle school somewhere in Connecticut, students will have to do without modern science lab equipment and field trip budgets will be cut, even as the political class at the Capitol and administrators and coaches at UConn continue to ride the gravy train.
As high schools struggle to find a way fund their athletic programs, UConn managed to find $3.4 million to pay head football coach Bob Diaco to go away, and somehow the university managed to scrounge around under the sofa cushions and find the cash to give President Susan Herbst and her top aides hefty pay increases last year.
Meanwhile, only two months after winning re-election, three lawmakers resigned to take much more lucrative jobs elsewhere in state government — an action that will surely result in enormous pension spikes for at least two of them. And this week we learned that legislators are entitled to file for mileage reimbursements just to drive to work at the Capitol. One racked up almost $15,000 in 2015. Don’t you wish you could get mileage for driving from home to the office? But most shockingly, mileage reimbursements are considered compensation for purposes of calculating pensions.
How about asking future state government retirees to make do with less? No, let’s make a small town delay improvements at the senior center or lay off a custodian at the elementary school. As they say, only in state government …
Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at ctdevilsadvocate.com and is news editor of The Berkshire Record in Great Barrington, Mass. Follow him on Twitter @terrycowgill.
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