Latest state fiscal problems put pressure on town’s budget
With the RTM vote on the budgets for the town and Board of Education only days away, news from Hartford could spell even larger problems. Income tax receipts for the state are well below the projected levels. According to reporting in the CT Mirror, projected revenues are now $2.2 billion short of funding needed to maintain services for 2017-18. This puts the shortfall for the biennium at nearly $5 billion.
Some point to the erosion as further evidence of people leaving the state, fed up with the dire financial straits. Others point to the fact that some of the top taxpayers in the state are still here, and that is a sign that the wealthy are not leaving. The governor’s budget office has said that the 100 largest taxpayers in the state paid 45% less income tax this year than they did last year.
Budget talks have still not made much progress. A proposal was put forth in the appropriations committee that scrapped some controversial portions of the Governor Malloy’s proposed budget. The governor proposed major changes to education funding, including removing almost all funding from some of the wealthiest districts in the state. Malloy had also proposed pushing $400 million in teacher pensions to municipalities, which would have impacted Darien with about $16 million to pay this fiscal year. The proposal in response Malloy rejected both of these initiatives by the Governor, but also added about $400 million in spending. This proposal was not voted upon in committee, as bipartisan support, and even simply enough support among Democrats, was not there.
State Republicans have put forth a budget of their own as well, as they have in each of the last eight years. The GOP budget also rejected the idea of pushing teacher pensions onto towns, which could signal just how little support this idea really has in the legislature. The budget also called for an end to the sales tax revenue sharing plan. Both the republican plan and the plans from Malloy rely on massive labor concessions, totalling nearly $1.6 billion over the next two years. If those concessions are not made, Malloy has acknowledged that layoffs are possible, to the tune of 4,200 jobs.
“The GOP Budget, "Confident Connecticut", like the other 10 budgets we have put forward in the last 8 years, is a solid plan that will stabilize our state finances and grow our state's economy,” said State Representative Terrie Wood, adding, “With the news of the new deficit, we will look to make the necessary adjustments without increasing taxes.”
State Senator Bob Duff was not a fan of the GOP budget, telling the CT Mirror, “The Republican budget raises lots of taxes, despite their rhetoric. Car taxes and property taxes will significantly increase for the middle class.” Still, the governor’s office called the GOP budget, “an earnest effort to balance our state budget.” This could be a sign of stronger bipartisan efforts to come up with a solution.
Malloy has acknowledged that republican support for a budget is something that is all but required, as the senate is now tied in democratic and republican seats, and the democrats only holding a slim three seat margin in the house.
Ultimately, both budgets have been thrown drastically out of balance by the news of low income tax receipts. These budgets are both out of balance by about $1 billion. The fact is, the bigger the deficit gets, the less the legislature can take the politically expedient approach. Taxes are going to have to be raised, and towns are going to have to make do with less.
Both sides of the aisle do now seem open to more transparent and bipartisan talks. Senator Duff and Senate President Pro Tem Martin Looney have asked republican officials to open budget talks to the media and broadcast them on television. Wood said she would welcome the transparency.
The RTM and elected officials in Darien will continue to watch closely, as more bad financial news casts a shadow over the budget process at the state level. It will also be fascinating to see how soon some of the “outside of the box” sort of approaches such as tolls, casinos, or even legalized marijuana get seriously entertained in an effort to generate revenue for the state.
The revised Board of Education budget, approved by both the Board of Education and Board of Finance, contains some projects which have been the subject of a great deal of debate. Some members of the RTM Education Committee, primarily Jay Hardison, have been very outspoken against some capital projects. The cafeteria expansion at the high school, which was one the previous year’s budget but delayed in favor of a more thorough investigation into costs, has been strongly supported by the board, the administration, and members of the community speaking at public hearings, including DHS students. The project is budgeted to cost about $1.6 million. The alternative high school program, Fitch Academy, is another initiative that some RTM Education Committee members have spoken against.
The total revised Board of Education operating budget amounts to $95,874,776.