HARTFORD, CT — Democratic Gov. Dannel P. Malloy invited reporters to his state Capitol office Tuesday to reiterate his goals for the legislative session and future budget negotiations.
Top on his list is still changing how municipal aid is distributed. He’s not backing down from a controversial proposal to have cities and towns pick up one-third of the cost of teacher pensions.
“No longer can Connecticut be the only state that fully absorbs these costs,” Malloy said.
Legislative leaders say they’re working on alternatives to the teacher pension proposal, but don’t have a plan yet for how to pay for it.
House Minority Leader Themis Klarides, R-Derby, said that pushing costs onto towns isn’t “true reform: it’s a different way of paying for the same thing.”
She called it the “ultimate gimmick.”
Malloy disagrees.
“We’ve laid out a hard lift, but one that’s necessary to address the state’s long-term problems,” Malloy said.
He said he’s heard complaints about how Connecticut’s fixed costs are high and one of the reasons is because the state funds teacher pensions in this way.
At least one municipal lobby group has said shifting any of the costs of the Teacher’s Retirement System to municipalities is illegal.
David Grogins, an attorney with Cohen and Wolf, drafted an opinion that says the governor “cannot require municipalities to contribute” to the Teacher’s Retirement System because state statute defines the allowable sources of funding. Municipal tax dollars is not one of the four funding streams.
Betsy Gara, executive director of the Council of Small Towns, said municipal officials are hearing from lawmakers who are not in favor of the proposal.
“We’re hearing this is a non-starter,” Gara has said. “And it’s causing a lot of budget upheaval at the local level.”
But so far legislators have yet to propose an alternative.
“Connecticut residents are tired of these shell games and cost shifts,” Klarides said. “We need to make real, structural changes that will result in more affordable, leaner government. This governor doesn’t seem to get it.”
Senate Republican President Len Fasano, R-North Haven, said all four caucuses are working in earnest to come up with a budget to close a $1 billion deficit. He said they’re working with the $1 billion assumption and assuming Malloy will be able to find the $700 million in labor savings that he promised as part of his budget proposal.
Fasano said lawmakers don’t have a high level of confidence in the governor’s budget proposal when it comes to the distribution of municipal aid so they’re working hard to come up with solutions to some of the changes Malloy proposed.
Meanwhile, Malloy also said Connecticut needs a clearer idea of where it’s headed before it continues to borrow. That’s why he canceled the state Bond Commission meeting next week.
“Waiting until we have a clearer direction for the coming biennial budget will allow us to make more informed decisions on bonding,” Malloy said.
Fasano applauded Malloy for the decision.
“I think it’s good,” Fasano said.
Budget negotiations are unlikely to even start until after the two-budget writing committees unveil their budget proposals the last week in April. With April 15 falling on a Saturday this year, state officials won’t get information about income tax receipts until April 20 or April 21.
