HARTFORD, CT — Two dozen local elected officials came to the state Capitol Wednesday to beg state lawmakers and Gov. Dannel P. Malloy to solve the budget stalemate quickly.
“It needed to be done yesterday,” Portland First Selectwoman Susan Bransfield said.
But finding the right blend of spending cuts and tax increases has not been easy for legislative leaders in closely divided chambers.
And complicating things further, the governor has continually said he won’t sign a budget that leads with tax increases.
Local elected officials said Malloy’s executive order will cause cash flow problems and his budget proposal would require municipalities to pick up part of the cost of teacher’s retirement costs.
“It’s naive to say a cut in local government is not a tax increase. It’s a huge property tax increase,” Coventry Town Manager John Elsesser said.
He said the question for legislative leaders is if you’re going to raise revenues what is the best and fairest way to do that.
He said in Coventry if the executive order moves forward then it would require him to eliminate everyone but the tax collector and it would require the residents to vote for a 26 percent tax increase.
“Are any of you going to vote for a 26 percent property tax increase?” Elsesser said. “It’s not going to happen. This is not a realistic plan. Stop it.”
He said to say a cut in state funding isn’t a tax increase is false.
Newtown First Selectwoman Pat Llodra said they are caught “in an ever-tightening vice for which we have no control and for which we have no ready response.”
She said by the fourth quarter of the year Newtown will be out of cash and will have to raid their reserves or send out supplemental tax bills or both.
She said if they raid their reserves then they will face a decrease in their bond rating, which in turn will increase the cost of borrowing, adding more debt and halting their ability to make necessary capital improvements.
Joe DeLong, executive director of the Connecticut Conference of Municipalities, said local elected officials didn’t expect to be held harmless this year as the state struggles to close a two-year, $5.1 billion deficit. The General Assembly approved a $1.57 billion labor concession package earlier this year, which brings the two-year deficit down to $3.5 billion.
He said they’re not here saying, “don’t touch our money.”
Rather, DeLong said, “We’re here as a group of people saying we have to be able to survive this thing and make the state economy grow and that’s not going to happen if you just shift the burden to the property tax system. There are ways to reform government to make sure that doesn’t happen.”
CCM wants the ability to eliminate some of the 1,300 unfunded state mandates and they want the ability to diversify their tax base.
Senate Republican President Len Fasano, R-North Haven, said Malloy’s decision to cut municipal funding is calculated.
“It was always his goal to push more burdens onto Connecticut municipalities which will result in property tax increases,” Fasano said. “ But taxing our way out of the state’s financial challenges is not a solution. The two largest tax increases in state history did not fix the problem; they made it worse and sparked the chaos we are facing today.”
There’s an acknowledgement even among those in Malloy’s administration that Connecticut’s cities and towns will run out of cash by January if they have to operate under an executive order.
Secretary of the Office of Policy and Management Ben Barnes explained in a letter to local leaders Wednesday that the reason they need information about how much communities have in their reserves is because they want to understand the ability of towns to survive the first two quarters of the year without funding from the state.
“How much you ultimately receive will impact your ability to end the year in balance, whether you have to dip into reserves, or even whether you need to levy supplemental taxes or make mid-year reductions to spending plans,” Barnes wrote. “Until we know what those aid amounts are, however, I am most concerned that communities have cash on hand to continue to operate until you get to higher-cash months starting in January.”
Barnes was responding the the complaints he received from local elected officials who bristled at the request for information.
Chris McClure, a spokesman for Malloy, said the administration is “acutely aware of the dire situation some towns and cities will face if the state continues without a budget.”
However, inaction was not an option when the General Assembly failed to adopt a biennial budget, he added.
Legislative leaders were meeting Wednesday afternoon to discuss the various proposals.