Guess what? Your property taxes are going up — probably by a lot!
Yes, it’s time for a new state budget and there is yet another massive deficit to plug. And, as usual, Gov. Dannel P. Malloy has come up with some sure-to-be-hated idea about how to rearrange the deck chairs on the Titanic. The governor outlined his plans in his biennial budget speech, which he delivered in front of the General Assembly in Hartford on Wednesday.
The governor is counting on a mix of tax increases, spending cuts, and unspecified “labor savings” to fill the $3.6 billion deficit. The tax hikes are the easy part, believe it or not. One of these is yet another hike in cigarette taxes, which is one of the few ways the state has to raise revenue that a ton of people won’t complain about. Another proposed tax hike is the elimination of the $200 property tax credit for middle-income families, which is a lot harder to sell. Still, could be worse, right?
The spending cuts and labor savings, on the other hand, are going to be unbelievably painful. Somehow the governor wants to come up with $1.56 billion from state employees who have already endured layoffs and spending cuts and other givebacks. Where is this money going to come from? Will we see a courthouse close, or a DMV, or a UConn branch? Will there be more layoffs? Salary cuts? None of these possibilities are pleasant.
The governor also wants to rebalance the way the state doles out money for education to municipalities. Everyone already hates this idea, because a lot of towns will be losing money.
The old formula had to do with how many students got free lunches, among other things. The new formula takes into account a town’s grand list, counts current enrollment — which apparently it wasn’t doing before — and uses, according to the governor, a “better measure of student poverty.”
This is actually a decent idea. It funnels money to the neediest towns and cities, while taking money away from towns more able to absorb the losses. Towns will also see specific grants for special education under this plan.
Unfortunately, the governor is also passing on over $400 million per year in teacher retirement fund payments to cities and towns. This is a new spending mandate, and it’s a doozy.
For instance, under the governor’s budget Middletown will get over $10 million more in state aid and from a new special education grant, but will have to fork over $3 million to pay for the teacher retirement fund. Suburban towns fare a lot worse. West Hartford, for example, would lose $8 million in grants, would have to pay $8 million to the teacher retirement fund, and get only $6 million in special education grants. That’s a loss of $10 million. Ouch.
In short, unless you live in one of the cities, your property taxes are going up should the governor’s plan pass.
So, the budget will be balanced on the backs of state employees and towns. I’m pretty sure that will happen no matter what shape the budget finally takes. A rise in property taxes and less money for state employees to spend means the economic recovery, which is still fragile, will be further hobbled.
The worst part is that there’s no end in sight. Nothing I’m seeing here is anything more than a short-term fix, just like the last three rounds of biennial short-term fixes in 2011, 2013, and 2015.
The way we fund state and local government has serious structural problems. Pensions are unaffordable. Revenue estimates are constantly off target. Cities and towns are increasingly responsible for carrying the load, but have no way to raise money beyond the property tax. It feels like we’re spending all of our energy trying to squeeze money out of a system that no longer works, instead of looking for something better.
Sal Luciano, executive director of AFSCME Council 4, called the governor’s budget “Groundhog Day,” because it feels like we’re just repeating the same cycle over and over and over again. The governor, legislature, and unions hammer out a budget, there’s plenty of pain, and the deficits come roaring back anyway. It’s starting to feel like a death spiral.
Is there any hope of something new? Can we really pull out of this before we smack into the ground? Will newly-empowered Republicans help shake things up? I wish I knew.
But, as we head toward the 2018 elections, it feels like we’re also heading for a reckoning.
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.
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