Towns to State: Now is Not the Time
by Hugh McQuaid | Jan 7, 2013 1:34pm
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(6) Comments | Commenting has expired
Posted to: Education, Town News
Christine Stuart File Photo
CCM Executive Director and CEO James Finley and Simsbury First Selectwoman Mary Glassman
State spending on municipalities accounts for about 14.2 percent of the state budget, so with the state facing a $1.3 billion deficit next year, the largest municipal lobby is warning that now is the wrong time to slash funding to towns.
In a document released Monday, the Connecticut Conference of Municipalities called for the state to maintain current funding levels to towns, relieve municipalities of state mandates, and to reform its education finance system. CCM also asked the state to encourage more regional cooperation among towns.
Jim Finley, CCM’s executive director, said municipalities are struggling to survive in the stalled economy.
“Municipalities across our state provide the public services that matter most to our people and businesses,” Finley said. “The state has made considerable efforts over the past two years to help municipalities stay afloat during the most challenging fiscal time since the Great Depression. Connecticut residents and businesses would be hurt badly if such investments were withdrawn.”
During his first two years in office, Gov. Dannel P. Malloy — a former mayor of Stamford — has avoided shifting the state’s budgetary burden onto municipalities.
This year, the municipal lobby asked the state for additional resources in some areas. For instance, it asked the state to increase its funding to the Education Cost Sharing grant. In its document, CCM said the state should modify the formula it uses to calculate how much funding towns get so it adequately reflects the actual cost of education.
Finley said that education costs make up an increasingly large portion of local governments’ budgets.
“Right now 62 cents out of every property tax dollar goes to pre-K through 12 education,” he said.
As a result, towns find themselves shrinking the resources they would normally divert to other town programs.
When Malloy first took office in 2011, his first two-year budget held towns harmless for the loss of federal stimulus funds that helped prop up the state’s share of the Education Cost Sharing grant. The ECS grant is the largest portion of revenue for most local budgets. Last year, Malloy added $50 million to the grant and formed a task force to come up with a better way of calculating how much municipalities receive from the state for education funding.
Last week, the task force issued its recommendations and proposed increasing funding to the ECS grant and phasing the new funds in over a four-year period. CCM released a statement praising the group’s work, saying the final report reflected many of the municipal lobby’s criticisms of the funding formula.
Given the current budgetary climate, Finley acknowledged it would be difficult for the state to add money to the ECS grant this year. But he said the legislature should take action on reforming the formula and then commit to fully funding the new formula over a period of a few years.
Dianne Kaplan deVries, who leads a coalition of 55 municipalities suing the state over what it says is “inadequate funding” said last week that the task force worked backwards from a fixed amount “with no consideration for what it really costs to do what schools need to be doing.” She argues the formula that the task force created does nothing to get at the chronic underfunding issues.
Malloy, who was once a plaintiff in the lawsuit, has done what he can to increase the amount of money going toward education.
Last year, under Malloy’s budget, 130 municipalities saw their ECS grants increase, while 39 towns saw theirs remain the same and no municipality saw their funding decrease.
CCM’s legislative priorities also called upon the state to provide greater assistance to towns for funding special education programs. Finley said special education costs in Connecticut are now over a billion dollars, of which the state funds only a small percentage.
Currently, in order for the state to step in and assist a municipality with special education costs, the town must be spending 4.5 times on a special education student than it does on its average per pupil cost. After that, the state will begin partially funding that student’s education. Finley said CCM would like to see that threshold lowered to 2 or 2.5 times the average per pupil cost.
Easing up on state mandates is another area the municipal lobby wants to see lawmakers focus this year. By CCM’s count, there are currently 1,200 state mandates, most of which are not subsidized by the state.
“They burden residential and business property taxpayers with significant costs and siphon precious resources from local services,” the document said.
One suggestion called for a constitutional amendment that would require the General Assembly to pass unfunded or underfunded mandates by a two-thirds majority. The group also asked that the state allow municipalities to defer property revaluations. Another suggestion asks that towns be allowed to post the availability of legal notices on their websites rather than the current requirement that they publish them in newspapers.
Tags: towns, Connecticut Conference of Municipalities, CCM, ecs, education funding, property taxes, mandates, dh
(6) Comments
posted by: timelord | January 7, 2013 1:41pm
It’s never the time, is it? How do the towns suggest that we cut spending? Maybe the CCM could offer some solutions to the State’s spending problems instead of continuing to beg for alms.
posted by: Noteworthy | January 7, 2013 4:09pm
The CCM has said this is not the year for cuts to towns and cities for as long as I can remember. And each year, the CCM demands more money, says to cut elsewhere. What the CCM is always silent on is where to cut, what specific programs do they recommend cutting? The silence is deafening. Moreover, the CCM says relieve the muni(s) of some state mandates - and help them save money. Ok. What mandates? Specifics? All they leaders of these towns got to make suggestions to a task force set up by Gov. Rell - and what did they come up with? Buttkus.
More whining about ECS? Here’s a clue - the state should mandate that every town find at least one sister city with whom to partner - so that you end up with one board of ed and one administrative cost; joint bidding for insurance and healthcare; union contracts and pay. And mandate that it be done by June 30th of this year. That way we could cut 169 kingdoms down to about 84 - think of the savings. The incentive of course would be to cut their ECS formula in half if they don’t. Fully funding cities does nothing but encourage more excessive spending in the schools, in the local government.
posted by: BrianO | January 7, 2013 4:51pm
The revenue/expense tension for all government is at the breaking point, as recently on display with the fiscal cliff debacle. The Volker/Ravitch Report prepared by the State Budget Crisis Task Force studied the fiscal crisis in 6 states because our sustained economic recession has created a situation of decreasing revenues and increasing need. The report states that the crisis is “a threat to social order.” This crisis is very real and requires an intense focus on the financial consequences of a variety of government decisions. For instance, Connecticut abandoned economic development at the same time it decided to become the regional leader in per capita incarceration. A decreasing tax base has become burdened by the social service needs that result from an over reliance on incarceration. Government needs to focus on preventative services, become more efficient regarding service delivery by actually measuring results of social programs, and actively support policies that will increase revenues. All of these decisions need to be coupled with fiscal discipline like the adoption of GAAP which would prevent Connecticut from understating the real costs of – again – prisons, which were deemed to be understated by 34% in a recent Vera study, by far the greatest disparity in the country.
While we can all appreciate the pressures on Municipalities, business as usual is not an option for our state. A request for more funding this year will be followed by next year’s request and so on. Coherent wholistic planning is required.
posted by: perturbed | January 7, 2013 9:35pm
Apparently, Now *IS* the time to give a helping hand to those *LEAST* in need.
Remember last August, when this headline came out? (click link for details)
Connecticut Offers Millions to Aid Bridgewater Expansion
Connecticut agreed to give Bridgewater a $25 million “forgivable” 10-year loan at 1 percent interest to help finance two buildings totaling 750,000 square feet (69,700 square meters). It will also provide as much as $5 million for job training, $5 million for alternative-energy systems and $80 million in tax credits, according to the statement.
Turns out, 2012 was a very, very good year for our favorite little hedge fund. (Did I mention yet that Bridgewater Associates is the largest hedge fund in world?)
Last year, Bridgewater Associates achieved a three-way tie for 43rd place among the most successful hedge funds in the world. Last year Bridgewater Associates made $6,600,000,000. (Is that more than double the amount the state spends in total on all 169 CT municipalities combined?)
See for yerself:
<a >The 100 Most Successful Hedge Funds Of 2012</a>
Scroll down to see Ray Dalio’s mug at No. 43.
Don’t be fooled into thinking that $6.6 BILLION in “assets” is assets under management (AUM). According to Bloomberg, the firm’s AUM is roughly $130 Billion. So that $6.6 Billion was what they raked in. (In a back of the envelope calculation, using the stated YTD return of 14%, and assuming a standard “two and twenty” fee structure, that comes out to over $6.2 Billion. So the $6.6 Billion is a plausible gross profit.)
So…
...we don’t have more funds for municipalities, unless your municipality is Stamford and you want to lure the largest hedge fund in the world from Westport, CT to Stamford, CT. (Where was Malloy the mayor before he took on his current “Hood-Robin” role?)
Keep watching the actions of the bonding commission to see how much more debt will be forced on the state for infrastructure improvements at Bridgewater’s new home, Harbor Point in Stamford.
—perturbed
posted by: perturbed | January 8, 2013 6:34am
^Bad link syntax above—try this link to see Bridgewater’s standing among the 100 most successful hedge funds in the world in 2012:
The 100 Most Successful Hedge Funds Of 2012
Scroll down to see Ray Dalio’s mug at No. 43.
—perturbed
