BRISTOL - The city is unsure how Gov. Dannel Malloy’s proposal to withhold the last quarterly payment of the Pequot Fund would impact the budget, because the state is expected to be late on adopting a budget.
The cuts to municipalities are part of a plan Malloy proposed Wednesday night to help close the current gap in state finances. They will withhold $19.4 million of Pequot Fund, which is money generated from a portion of casino slot-machine revenues that is split between the state’s 169 municipalities.
If the proposal is adopted Bristol is expected to see a $188,361 cut.
“If the proposal goes through before we adopt a budget on May 31, then we can plan accordingly and lower expenses to match revenue, but if it’s after we can’t,” said Comptroller Glenn Klocko. “The state has to adopt a budget on June 7, so if it goes through in that week we will have to go back and rework the budget when we enact it July 1.”
Pequot funds are distributed to municipalities quarterly. Under the governor’s proposal, the last quarterly payments from the 2016-17 fiscal year - totaling $19,358,872 across the state - would not be distributed and would be used instead to mitigate the budget.
This poses a problem for Bristol because the last quarterly payment from the Pequot fund in the amount of $141,250 is set to be received on June 30 and has already been factored into the next fiscal year’s budget that has to be adopted by the end of the month.
“We [the city] aren’t being told enough. There’s limited information so it’s difficult to get a good understanding and prepare, because nothing is set in stone yet,” Klocko said.
Part of the proposal would appropriate $2 million from the Regional Vocational-Technical school system that contains about 21 schools across the state, one being Bristol Technical Education Center, explained Christopher McClure, strategic research and communications advisor at the Office of Policy and Management.
“The money from vocational and technical schools is a particular part of the rescissions, because they are funded through appropriation,” said McClure. “They receive $163 million from the education department for this year and on paper they showed there was a little over one percent left over from their total budget that we realized can be immediately put towards the deficit.”
The state is not likely to resolve the budget issues by the close of the General Assembly, said Kevin Maloney, director of communications and media relations at the Connecticut Council of Municipalities.
“It’s not expected. The large projected deficit posed makes it a challenge to come to an agreement,” said Maloney. “It’s unknown when the state will apply a budget. It won’t be by their deadline of June 7, but it’s hoped to happen before the end of the month. If it’s after June 30, who knows what will happen?”
Each municipality creates and adopts a budget at different times, typically in April, May or June, which means the budget approval process could be delayed, or reworked after adopted, explained Maloney.
“If the state applies a plan after the end of the month, they will then adjust their budget because they will have to balance expenditures if the state aid is less than expected,” said Maloney. “How that will work depends on the charter of each town.”