Local Officials to Lawmakers: Don’t Cut State Aid
& Give Us Choices
by Christine Stuart | January 5, 2009 3:59 PM
Posted to State Capitol
Two days before the start of the 2009 legislative session, local elected officials wanted to give state lawmakers a simple civics lesson.
“The state of Connecticut has a lot of choices as to how it can raise revenues,” New Haven Mayor John DeStefano Jr. said at a Capitol press conference . “Cities and towns do not have those choices. We have two sources of revenue: property taxes and state aid.”
“We’re looking for choices,” he said.
By choices, DeStefano and his colleagues from the Connecticut Conference of Municipalities said they want lawmakers to consider sharing sales tax revenue, give municipalities broader authority to impose user fees and fines, and delay unfunded mandates, such as in-school suspensions, raise the age legislation, and web-posting requirements. Local elected officials said they would also like to see the state defer property revaluations and help municipalities with regionalization efforts.
Last year the Finance, Revenue, and Bonding Committee thought it had found two innovative ways to help out municipalities.
The first was the creation of a delivery tax to fully fund the state’s payment in lieu of taxes grant, also known as PILOT, which helps pay for state properties and hospitals that are not subject to local property taxes. The second bill would have allowed municipalities to keep half of the 12 percent hotel tax levied by the state on tourists who occupy a hotel room for less than 30 days.
Both proposals died last year when the General Assembly and Gov. M. Jodi Rell agreed to stick with the two-year budget they had passed in 2007. Click here to see how much sales tax revenue municipalities expected in 2007 given three different scenarios spelled out in the graphic.
What makes DeStefano and his colleagues confident the measure will come up again this year?
“Cause their budget problems are so urgent, they’re going to have such a difficult time budgeting for themselves that I think they’re going to look at alternatives,” DeStefano said. “As they wrestle and grapple with what they’ve gotta do to close the budget, they’re going to look at some things they didn’t do before.”
The state is facing a $343 million budget deficit in 2009 and a more than $6 billion budget deficit in the two following years.
CCM has proposed increasing the state sales tax from 6 percent to 7 percent and sharing half of the increase on regional cooperation efforts. It has also proposed allowing these regions to levy their own regional sales and hotel taxes for infrastructure and economic development projects.
Hartford Mayor Eddie Perez said if the state fully funded PILOT and gave the Capitol City its $25 million that it would go a long way to helping solve the $34 million budget deficit.
Bridgeport Mayor Bill Finch said his city is running a $20 million budget deficit.
“Bridgeport is a couple blizzards away from bankruptcy,” Finch said.
Simsbury’s First Selectwoman Mary Glassman said cities and towns are in a bad position because, “We can’t come up here and ask the state for more money and we can’t go back to our communities and ask our taxpayers for more money.”
She said the difference between last year and this year is, “the intolerance of our property taxpayers to get a tax increase.” She said it’s even more urgent than before that state and local officials work together on this problem.
Unlike the federal government, local governments are required by law to balance their budgets.
James Finley, executive director of the Connecticut Conference of Municipalities, said local officials are also looking at regionalization efforts, which would not create a new layer of government but would allow the state’s 169 cities and towns to negotiate contracts on a regional basis through the 15 already established regional planning organizations. He said this would begin to equalize the salary and benefit levels of municipal employees on a regional basis.
CCM is also calling for legislation which would allow labor contracts in municipalities that meet a certain threshold of fiscal distress to automatically be reopened.
Why not call for changes to the state’s binding arbitration law?
“We’re looking at things that are realistic,” Finley said.
Local officials also asked the state not to cut state aid programs, such as the Education Cost Sharing, Town Aid Road, or PILOT.
Click here to read the post on this press conference from The Real Hartford blog.
Comments (8)
Posted by: Christine | January 5, 2009 5:28 PM
Check out The Real Hartford's take on today's press conference.
Posted by: cedarhillresident![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| January 5, 2009 7:10 PM
hmmm I support all of this. Glad they are up there this soon in the year. But we did all of this last year. Are we working on the nay sayer's of last year? Do the smaller city's even grasp what can happen if the larger city's go under?
And I am confused about on one thing mentioned in all the articles. Property revals being delayed? What does that mean to the average joe?
Posted by: Doug | January 5, 2009 7:46 PM
Hi cedar... delaying the revaluation process puts off a potentially large tax increase for property owners. Every few years towns have to do these revaluations, essentially because not doing so would mean a person who has owned a home for a long time (like 30 or 40 years) wouldn't be paying their "fair share" of taxes. Unfortunately it also means they're taxing property owners on unrealized increases in property value. No one makes more money because their home's value has increased, particularly if they haven't sold it.
A lot of folks think reval simply enables towns to hike taxes and continue out-of-control spending habits ... others say reval keeps the burden even and helps towns grow at a healthier rate while improving education systems.
Reval doesn't mean much to folks who don't own property, although a landlord may hold off on a rent increase if his/her property taxes don't go up.
Posted by: Jon Searles | January 5, 2009 8:31 PM
There is no way Bridgeport DOESN'T have 20 million in pork to cut from it's city and school budgets.
The last thing we should do is squander this once in a life time opportunity to teach cities and towns about fiscal responsibility. Allowing them to raise taxes across the board or be bailed out by state aid is a horrible idea.
Posted by: Walt![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| January 6, 2009 9:09 AM
Reevaluation means different things in different Towns
While in many towns it means an increase in assessment over the years, in others, like Hamden which had recent reevaluation, it would it mean a reduction in assessments as current evals are from the peak years of home values,
In theory, it makes no great difference because mil rates will go down when assessments go up, and vice versa.
In reality I have never seen a reeval where the politicians did not manipulate the mil rate to allow a significant increase in total spending while attempting to convince the mathematically disadvantaged that their taxes have been reduced.
Next reevals , with assessments for the most part going down if they are legitimatically done, will make it tougher for the pols to trick folks, as mil rates will certainly increase quite a bit unless real spending cuts are made.
Posted by: Walt![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| January 6, 2009 9:18 AM
"Legitimatically".WOW, I invented a new word above,
Sorry!
Also "mathematically"? Is there a simple rule re ending words in "ly" or "ally'?
Posted by: cedarhillresident![[TypeKey Profile Page]](http://www.ctnewsjunkie.com/nav-commenters.gif)
| January 6, 2009 9:43 AM
Walt thanks and doug too.
I know New Haven had a reval based on 2006's market. And my guess is that most property's are over valued right now big time. To do a reval would give a true value to the property's. And yes walt it may of course just bring the mill rate up, but even with that being the case it would at the least give the citizens of the city a better prospective on how much over spending is really happening! I say do the reval!
Posted by: City Hall Watch | January 6, 2009 10:29 AM
When New Haven went through reval, it did not lower the mil rate as nearly every town and city does. It kept the rate flat which in effect was a 2 plus mil rate increase. That was done to rip more money out of the pockets of taxpayers by intentionally pulling the wool over their eyes. That same year, DeStefano went on a spending spree, adding more than $30 million in new and increased spending to the city budget - more than twice the annual rate of increase. He even offered to buy the superintendent a new car and gave himself a $16,000 raise and a new $3500 armoir. He rides around in a city car, has not curtailed travel; cut executive staff; has not combined all healthcare policies under one super policy that could save millions or done any of the other things one would expect of a city in financial trouble. In three weeks, he will cristen a new $70 million school on prime, revenue producing Class A real estate in downtown New Haven and continue building and planning school construction projects in the face of declining public school enrollment. In fact, it's declining so fast in the magnet schools they've actually spent money to advertise these schools in the movie theaters.
Secondly, any idea to layer on more taxes to strapped citizens, property owners and non-profits should be shot down immediately. They're really get creative - DeStefano wants to levy a rain tax on everybody. Does anybody think we are not taxed enough? These towns and cities made fortune in the go go real estate days with their "temporary" real estate sales tax. That was supposed to sunset, was supposed to help them get through a crisis. What did these "smart" people do? They treated it as ordinary revenue and began building it into their revenue platforms. Now, it's down because of the economy and they cry. New Haven endlessly borrows money through the bond system for everything from sidewalk repairs to street paving. It pays cash for very little if any capital projects.
Glassman, DeStefano, all these mayors and selectmen who can't figure out how to balance a budget without taking more from us needs to find another job because they lack the mental acumen and integrity necessary for real leadership.
The payroll and services in these towns and cities have to be cut back to a level that the public can afford. What is so difficult about this? Every time these "public servants" take from our checkbooks, we cut back somewhere else to pay for it. Why are they incapable of doing the same thing? We do.