HARTFORD, CT – Leaders of Connecticut’s 169 towns were breathing easier Thursday after the House and Senate overwhelmingly passed a $41.34 billion, two-year budget that spares huge municipal budget cuts.
The budget, which passed by a 126-23 vote in the House after passing 33-3 in the Senate earlier in the day Thursday, also contains no mandated municipal contribution to the Teachers’ Retirement Fund.
Both margins ensure there are enough votes in both chambers to override a potential veto by Gov. Dannel P. Malloy.
“Municipal leaders acknowledge the difficult choices made by state leaders in forging this bipartisan budget agreement and the impact they have on the lives of Connecticut residents,” Connecticut Conference of Municipalities Executive Director Joe DeLong said. “The actions taken by state leaders to support cities and towns protects the interests of residents and businesses across the state and for that we are grateful.”
Because the state has been operating without a spending plan during the ongoing four-month budget stalemate, towns were facing extensive funding cuts under Malloy’s executive order. The cuts would have zeroed out education aid to 85 municipalities and greatly reduced funding for 54 more.
Click here to view of copy of municipal grant amounts.
Under the budget agreement, every town will receive some level of education aid and will not be zeroed out. The overall ECS grant, which is the largest amount of state aid for many municipalities, was reduced by $30 million for the current fiscal year.
The 30 of the state’s lowest performing school districts in cities such as Hartford, New Haven, and Bridgeport, will be flat funded based on 2017 levels and the $30 million ECS cut will be distributed among the remaining 139 towns.
But the big winners, even though they are losers, are the wealthier communities who stood to lose hundreds of thousands of dollars, if not millions under earlier budget plans floated.
Guilford and Branford, for instance only receive about $182,000 less this fiscal year than last year under the budget approved. Officials in those towns were bracing for much larger cuts – and fearing they might have to send out supplemental tax bills after the state budget was finally adopted.
The agreement was also applauded by the head of the Connecticut Council of Small Towns (COST).
“COST applauds lawmakers on both sides of the aisle for approving a budget that will allow Connecticut’s towns and cities to provide quality education, public safety, transportation and other critical services to residents without imposing additional burdens on property taxpayers,” said Betsy Gara, COST executive director.
Dodging the contribution to the Teachers’ Retirement Fund, which the budget avoided by tacking another 1 percent contribution on the teachers towards their retirement, was the signature issue for the municipalities.
When Malloy first proposed his budget back in February it asked towns to kick in $400 million this fiscal year for the retirement fund. Subsequent budget plans pared that number down to $280 million.
“One of our biggest concerns this session was a proposal that would have required towns to pick up millions of dollars in teachers’ pension costs,” Litchfield First Selectman Leo Paul, who is also COST president, said.
“Fortunately, lawmakers recognized that this would have imposed a crushing burden on Connecticut’s towns and cities,” said Paul.
Connecticut Education Association President Sheila Cohen said they are dismayed that legislators would vote to increase the payroll tax on teachers.
“While we appreciate the fact that legislators reduced the two percent increase in the teacher tax down to one percent, this increase does not strengthen the teacher retirement fund—it simply allows the state to reduce its share and pocket the $38 million in new tax dollars paid by teachers,” Cohen said. “This is wrong because teachers have reliably contributed their fair share every year.”
Municipal leaders also applauded some mandate relief language in the final budget package.
DeLong noted the budget gets rid of a last-minute plan to eliminate the property tax on motor vehicles. “This would have shifted approximately $700-800 million onto an already overburdened property and commercial property tax base,” he said.
And both he, and Gara of COST, applauded some mandate relief the budget brings, noting arbitrators will now be allowed to make decisions beyond choosing strictly between the “last best offers’’ from each side.
Gara said: “The bipartisan agreement also includes changes that will help towns control education costs, which make up as much as 70-80 percent of a town’s budget. For example, changes to the state’s binding arbitration laws will help towns hold down personnel costs, which account for a significant portion of our education budgets.”