Fiscal Deadlines and Teachers’ Retirement Fund Top Agenda
PLANTSVILLE, CT — The timing of municipal aid and who should be responsible for funding the Teacher Retirement System were primary topics of discussion between legislative leaders and municipal officials at the annual Council of Small Towns (COST) meeting Wednesday.
The panel of legislative leaders included House Majority Leader Matt Ritter, D-Hartford, Senate Republican Leader Len Fasano, R-North Haven, House Minority Leader Themis Klarides, R-Derby and Sen. Cathy Osten, D-Sprague.
In his first address to the General Assembly last week, Gov. Ned Lamont said he wanted to “fix this damn budget, once and for all!”
He said legislators owed it to Connecticut’s first selectmen and mayors.
“In six weeks, I will present to you a budget which is in balance not just for a year, but for the foreseeable future; so that mayors and first selectmen, business and labor leaders, teachers and police officers know what to expect. And we will deliver on what we say — on time and on budget,” Lamont said.
But, even if the governor and legislators meet that deadline, it was noted at the COST meeting that it is too late for many towns who set their budgets before the state does.
Klarides said the state “should have our budget, particularly the part that talks about municipal aid, by April 1st. We feel strongly that it is our obligation to get our budget done so that you know what you are working with.”
But Ritter said that wasn’t realistic, noting that the “workhorse” of the state budget is knowing what income tax receipts will be, which aren’t known until the middle of April.
He had a different suggestion for town officials: “towns that have the ability to change your (budget) adoption dates should do that.”
The deadline this year for the two budget-writing committees isn’t until the first week in May, which is long after municipalities must vote on their budgets or schedule referendums.
Fasano said whenever the state adopts a budget this year, it is his hope that, at the least, no town loses funding.
“We need to try to keep them at least at the same level if we can’t increase them,” Fasano said.
Who should be responsible for trying to fix the Teachers’ Retirement System is clearly an issue that is front and center on the minds of both the legislators and COST members.
The state’s annual contribution to the Teachers’ Retirement System is about $1.3 billion, but it could top $3.25 billion to $6.2 billion by 2032, depending on different experts, because of decades of underfunding. Connecticut didn’t start setting aside money to pay for teacher retirements until around 1982.
Outgoing Gov. Dannel P. Malloy tried to shift some of the costs of the program to the towns but was unsuccessful in getting that through last legislature.
Some have suggested that Lamont and the new legislature can try the same approach with the teacher unions that worked with state workers — specifically lengthening the payment term for the unfunded liabilities over a longer period of time, or exploring an option suggested by State Treasurer Denise Nappier to issue lottery-backed revenue bonds sufficient to generate cash proceeds of approximately $1.5 billion for deposit into the Teachers’ Retirement Fund.
Ritter said he thought using the lottery funding for the teacher retirement fund was a proposal that deserved serious discussion in the General Assembly.
But Fasano wasn’t buying it.
“There is a problem because of the state and now we’re going to ask you to help solve it,” Fasano said. “You have enough problems — we have to solve it in house,” he said to a smattering of applause from the COST members.
“It’s going to take some fiscal determination,” he said to the selectmen and mayors. Fasano said if the state asks the towns to take on part of the cost of the retirements that the state will keep going back for more.
“It’s $5 today, $10 in a month, $30 two years from now,” Fasano said. “We never promise something and say that’s it. Once you burst that barrier, that’s a slippery slope.”
But Osten said once problem with the current teacher pension system is “the state has no control.”
She noted that even those in the audience — selectmen and mayors — don’t have control over the teachers’ salaries and pensions in their owns towns.
“Most of those negotiations are done by your boards of education,” Osten said.
Newly elected COST President Rudy Marconi, who is First Selectman of Ridgefield, said he knew he was taking over the leadership of the organization at a tough time — a time when hard decisions about the state’s fiscal crisis will be made and may trickle down and hurt COST members.
He encouraged his fellow selectmen and mayors “to look at the state as a whole.”
“It took a long time to get where we are today,” Marconi said. “We need to look at our state as a whole. We need to come up with solutions that we may not all like individually but are good overall.”
Marconi said the sign of a good settlement for a town when it sits down over issues such as union negotiations is that “both sides come out not happy.”