HARTFORD, CT — When the General Assembly passed the new two-year budget in October and then tried to fix it in November, they apparently left three communities holding the bag, so to speak.
Specifically, the legislature failed to modify language that shortchanged Bridgeport, Hamden, and Torrington with respect to reimbursements for local car taxes.
The mayors of those three communities wrote the Office of Policy and Management explaining their predicament, which resulted from property revaluations that happened or were imposed after 2015 when the state first implemented its new supplemental car tax payment structure. The three towns’ revaluations were not considered in the motor vehicle tax reimbursement calculation for the new budget, which means the towns are not going to receive money to cover the difference between their mill rates and the state-mandated 39-mill cap on car taxes.
Hamden Mayor Curt Leng said addressing the issue is vitally important because not fixing it means the town will be looking at layoffs to make up a $2.05 million shortfall in revenue.
“That kind of hit in the budget will have a real impact on our municipality up to the inclusion of significant layoffs,” Leng said.
Bridgeport Mayor Joe Ganim wrote OPM in December and said the shortfall for his community would be about $7.1 million, which is the difference between 39 mills and 54.37 mills.
And Torrington’s budget would fall short by about $1.4 million.
That comes to a shortfall of $10.59 million between the three towns if they were reimbursed 100 percent for the difference between their current mill rate and 39 mills.
“As a result of this discrepancy of motor vehicle tax reimbursement, our cities are facing unfair hardship including millions slashed from already lean budgets, and potentially mid-year layoffs of teachers and 2 closing schools, threatening the quality of education and life in our communities,” the three mayors said. “This particular discrepancy — in our view — also violates the principles of the original SB1 proposal to make municipalities whole for lost motor vehicle tax revenue while capping the mill rate on cars to give our residents much needed tax relief.”
Based on the October agreement there was $5 million allocated to offset the $10.59 million impact on the three communities, but OPM announced in November that it would not spend that money as part of budgetary “holdbacks.” So the leaders from the three communities wrote a letter to Barnes on Wednesday requesting that the $5 million be released to them:
“We propose that Bridgeport — the state’s largest municipality facing the most dramatic reduction in state aid during the current budget — be allotted the majority of the funds, some $3,408,375. We also propose that Hamden be allotted $966,311 and that Torrington receive an allocation of $680,999. These numbers are based on a formula we have calculated to distribute 67 percent of the available revenue to Bridgeport, 19 percent to Hamden, and 13 percent to Torrington,” the letter from the three mayors said.
Senate President Martin Looney, D-New Haven, said he believes the $5 million should be distributed to the three communities.
“We want to find a way to cushion the blow for them,” Looney said.
He said they had intended that the money would go to the three communities.
But OPM still seems reluctant to release it as the state faces a $224 million budget deficit.
“We are attempting to limit discretionary spending — as the statute allows in this case — where possible while the state budget sits $224 million in the red, deficit mitigation seems stagnated, and revenue uncertainty could create additional problems in the spring,” Chris McClure, a spokesman for OPM, said Wednesday. “We will continue to work with the affected municipalities to ensure their needs are being met and, if the budget environment improves, or if other contingencies arise, then we will re-evaluate our discretionary spending.”
The three towns are hoping to meet with OPM to discuss the distribution of the $5 million in the short-term and continue the discussion when the General Assembly reconvenes in February.