Cuts in state aid to towns ‘inevitable,’ House speaker says

As published in the Record Journal, Saturday January 12, 2013

By Ed Jacovino

Journal Inquirer

HARTFORD — State aid to towns is going to be cut when lawmakers pass a two-year state budget this spring, the new speaker of the House of Representatives said this week.

“It’s inevitable that there are going to be some cuts,” House Speaker J. Brendan Sharkey said in an interview with the Journal Inquirer. “I hate to say that. I’ve been a longtime advocate for protecting cities and towns and Boards of Ed from cuts in funding from the state.”

Sharkey, D-Hamden, who took the gavel as speaker when the legislative session started Wednesday, said cities and towns shouldn’t be surprised. They were spared cuts in each of the last two budget years, as lawmakers raised state taxes significantly but sought to avoid similar property-tax increases, he observed.

“I don’t think it’s news to any cities and towns and boards of education out there,” Sharkey said. “They all are very appreciative of the fact that we’ve done as much as we have to hold them harmless for the last two years.”

Lawmakers are facing projected deficits of more than $1billion in the roughly $20 billion state budget in each of the next two years.

Sharkey said the state should work with towns to “mitigate the impact” of any cuts.

The biggest grants to towns are for schools, through the $1.9 billion Education Cost Sharing program. Others are payment in lieu of taxes, or PILOT grants, in which the state reimburses towns for state facilities such as prisons and airports along with other tax-exempt property, like universities and hospitals. There are a number of smaller grant programs as well.

Municipalities say cutting state grants to them means property-tax increases aren’t far behind.

“You’re transferring the state budget problems onto cities and towns and the property tax,” James Finley, executive director of the Connecticut Conference of Municipalities, said Thursday. His group of mayors and first selectmen is going to oppose any cuts, he said.

While Finley said he’ll look to block reductions in municipal aid, he acknowledged cuts could be a bargaining chip towards the state eliminating requirements he calls “unfunded mandates” that cost towns money.

An example is a requirement to pay a “prevailing wage” for construction projects that cost more than a certain amount. Finley has been pushing for years to increase the threshold — exempting more projects from the requirement.

“Right now we’re not willing to say that we’re going to agree to municipal cuts without understanding what other efforts might be made to reduce municipal costs,” Finley said.

Gov. Dannel P. Malloy, a Democrat and former mayor of Stamford, has boasted that he closed a state budget deficit two years ago without cutting payments to municipalities. Instead, Malloy and the Democrat- controlled legislature increased state taxes and negotiated concessions with state employee unions.

Finley said that, after conversations with Malloy, the prospects for towns this year aren’t good.

“This is the first year that he hasn’t given us an unequivocal, ‘I’m not going to cut you guys.’ That’s a cause for concern,” Finley said.

Malloy, however, is still staying neutral on the issue. He has said he doesn’t “intend” to raise state taxes.