The 2019 Connecticut Legislature is underway and by all indications this will be a session with much promise as well as much controversy.
Fiscal issues will be at the forefront of legislative proposals. With the specter of a gigantic looming deficit, early proposals have been coming fast and furious. They include extending the sales tax to necessities such as groceries and medicines, legalizing recreational marijuana, legalizing sports betting, and reestablishing highway tolls, all of which have direct state budget implications.
Playing out at center stage of the legislative theater is the issue of aid to towns and municipalities. Local leaders have a sharp eye on the legislature.
The Connecticut Conference of Municipalities and the Connecticut Council of Small Towns are both focused on the state budget and its ramifications for local budgets. Municipalities, which deliver so many of the vital services required of government, are concerned as they are hard pressed to come up with new streams of revenue to carry out their core missions and new initiatives
New Britain’s Mayor Erin Stewart, one of the most knowledgeable and effective mayor’s in Connecticut, probably said it best in a column in this paper early in January when she stated: “ We will be fierce advocates in Hartford to ensure that we are receiving our fair share of state funding for our community.” In a more recent quote, she pointed out the need for municipalities and the state to work together toward getting “creative and innovative” to raise revenue for essential services after referring to a $1.2 million reduction in state aid to New Britain in the last budget year.
Still another quote from the mayor of New Britain: ”….municipal governments of Connecticut are experiencing serious difficulty in financing their respective governments and as the major portion of the revenues raised by the Cities and Towns of the State are derived from the taxation of real estate and as real estate can no longer bear the present disproportionate and confiscatory tax, other sources of revenue must be made available.”
If you don’t remember having read this last quote, it’s probably because it was not uttered by Mayor Stewart, but rather by former New Britain Mayor George A. Quigley ( also one of the great Mayors in New Britain’s history) in his Annual Message of May 18, 1932!
Mayor Quigley, in that dark economic climate , stressed that municipalities cannot continue with just real estate and personal property taxes and that the “ the present system of real estate taxes is antequated (sic).” Remember that was in 1932. He further reported that he had convened a conference of the executives of the various towns and cities which was held in New Britain resulting in the formation of the Connecticut League of Municipalities. Quigley stated that municipalities “ stand on the brink of an economic pit wherein we fear we may be plunged.”
His call was for the State to “ be as generous and unselfish to the municipalities as the municipalities have been to the State.”
While the circumstances of the Great Depression years certainly differ from today’s economic situation, the parallels between municipal needs then and now are striking. The fact that laments of today’s local leaders concerning the need for greater state assistance are almost identical to those of decades long past highlights the need to continue to examine potential fundamental structural changes in funding mechanisms for critical government services at both the state and local level.
Much thoughtful attention has been given to the issue by state legislative leaders and undoubtedly this effort will be further intensified in the current session. Happily, legislators from the Central Connecticut area are very well versed and sympathetic to the plight of the local communities. Our new Governor’s proposals concerning municipalities and any possible relief from local property taxes will be revealed in a few weeks.
But municipalities cannot feel comfortable in their quest for “fair share of state funding” until the budget deficit gap comes under control. All await Governor Lamont’s game plan in that regard.
The first task then is to close the budget deficit gap by a reasonable balance of expenditure reductions and enhanced new streams of revenue. Easy to say but a monumental task to accomplish. But it can and must be done.
A great deal will be needed to achieve the appropriate level of funding for municipalities including and certainly not limited to:
- Realizing additional revenue enhancements some of which were mentioned above.
- Recognizing the stark realities and unique issues facing the most at need school districts within Connecticut’s larger municipalities.
- Revisiting the adequacy of state payments to municipalities in lieu of taxes for exempt properties.
- Avoiding unrealistic state initiatives shifting obligations from the state to municipalities and thus exacerbating municipal problems. Municipalities need relief, not additional burdens. Similarly. Municipalities should be very cautious about seeking to shift costs to or assess fees on local tax exempt entities which are their partners in providing critical services.
- Attaining greater efficiency at the local level by cooperative and regional initiatives, but only after local input.
- Considering the recommendations of the State Commission on Fiscal Stability and Economic Growth concerning municipal revenues.
- Insuring that well managed municipalities are not disadvantaged by their successes and that favorite communities don’t receive preferential treatment at the expense of others.
The need to strike the proper balance between raising revenue and providing services in the state/ local government partnership is a critical constant. Mayor Quigley’s message is as true today as it was then: local governments have growing obligations and very limited additional means to bring in more revenue. Recognizing the needs of our local governments and providing essential support for those needs must remain a top state priority.
All will need to share the pain of the effort to close the state budget deficit and municipalities are no exception. But local governments should not become casualties of the effort.
Times may change for our municipalities but their challenges remain constant.
Harry N. Mazadoorian is an attorney and commercial arbitrator and mediator. He has served as majority leader of the New Britain City Council and as Legislative Commissioner for the State of Connecticut.