House Democrats offer budget proposal in wake of Malloy proposed cuts

As the state continues to run without a budget, town aid is lost with each passing day. Recently, Governor Dan Malloy, who is currently running the state finances via executive order, proposed significant cuts to municipal aid across the state, particular in education funding. Malloy’s proposal erased all Education Cost Sharing grant funding to Darien and 84 other towns in Connecticut. The proposal shifted nearly 78% of state education aid to the 30 lowest performing districts in the state. On Wednesday, House Democrats unveiled their own budget proposal in response to the Governor, and the proposal would restore education aid for most of the state. Darien, however, once again would receive no ECS funding.

The budget from the House would take just $10 million of the $2 billion ECS pool and shift it to lower performing districts, which is a fraction of a percent rather than the 78% proposed by Malloy. However, 25 districts would still lose all their ECS funding, including Darien where the dollar amount was just over $400,000. Darien budgeted to receive no ECS funding at all in anticipation of a cut such as this, should this budget proposal move forward.

It is unclear at this time what cuts or changes could be coming related to the Excess Cost Reimbursement Grant, which is funding for special education students and programs. In past years this has amounted to just over $2 million in special education aid to the district.

Darien would also see a cut in other municipal aid from about $180,000 to just under $20,000. The House Democrats did not release a grant by grant breakdown, rather just overall aid numbers and how they would be changing.

While Malloy’s proposal had pushed about $400 million to cities and towns to pay for teacher pensions, the proposal from Democrats did not. House Democrats did propose raising the sales tax from 6.35% to 6.85% and adding a surcharge on hotel and restaurant transactions to raise revenues and close the gap. There is also an increase in the tax rate on cigarettes.

The tax increase on real estate transactions that are more than $800,000, referred to as the “mansion tax,” would also be part of the both Malloy and the Democrat’s proposal.

After the proposal, Malloy’s office released a statement saying he would not support the budget put forth by the House democrats, largely because of the proposed sales tax increase and other revenue increases.

State Senator Carlo Leone, who represents both Stamford and Darien, said that he is currently reviewing the proposal from the democrats in the house. “The Senate is reviewing and discussions are still underway. We are all hoping to meet the deadline but until complete agreement is achieved, it is only a proposal that can or may change,” Leone said.

State Senator Bob Duff did not comment specifically about the budget put forth by his fellow Democrats in the house, but said that in the senate, work continues towards a budget that will pass.

“It is in everyone’s best interest that we soon reach an agreement on a budget. Democrats in the Senate have been working hard to produce a final balanced budget proposal that provides predictability and stability to families, service providers and businesses. I am committed to working to pass a budget that meets the needs of Norwalk and Darien,” Duff said.

State Representative Terrie Wood also weighed in on the proposal from her colleagues across the aisle in the house.

“It's good  that House Democrats have come forward with some budget ideas. It is essential to have their ideas on the table for discussion. The Republican budget was presented at the end of April in full detail with no tax increases and supports municipalities, schools, transportation and the social service safety net. We can now compare ideas and can find common ground on which to build,” Wood said.

There were parts of the proposed budget that Wood took issue with, namely the raising of revenues and spending.

“I understand there are $1 billion in tax increases in the House Dems budget outline. Until we right our fiscal ship, I'm opposed to tax/fee increases. We cannot tax our state out of our cycle of plunging revenues and increased spending. Since 2010, the Democratic majority has increased state spending by 19.5%.  We need to look at how and where we are spending money and what we can do differently,” said Wood.

Wood pointed to the recent SEBAC agreement as a missed opportunity to look at how money is spent and how changes can be made. The labor concession deal saved the state over $1.5 billion through a three year wage freeze and other concessions, but extended benefits until 2027 when they were set to expire in 2022.

“The Democrats chose to continue down the same path of  allegiance to the union leaders with salaries and benefits — that despite being modified slightly — still don't do enough to put us on the path to fiscal sustainability. The Democrats vote on that contract all but guaranteed tax increases for the next decade.”  In the House, John Hampton of Simsbury was the lone Democrat to vote in opposition to the contract.

While specific numbers pertaining to the Excess Cost Reimbursement grant, which pays for special education costs, for Darien still are unknown, Wood said she, “feels strongly that all children challenged with a disability should be equally funded across districts.” First Selectman Jayme Stevenson has also said that funding for special education should not be decided by a student’s zip code or “wealth metrics.”

A budget is still awaited from Senate Democrats. According to Wood, legislators have been told to hold Sept. 14 as a date to debate and vote on a budget.

“The longer we wait to set a budget — and we are now almost three months past the constitutional  budget deadline — the longer our schools, municipalities, and the social service needs of our citizens will be in limbo.  Out of respect for all we need to get this done,” said Wood.

State Representative William Tong spoke about the proposal from his fellow House Democrats, and echoed recent statements pledging to fight to be sure funding and aid comes to Darien.

“This budget proposal does not impact Darien’s Excess Cost grant.  As I said before, the state’s commitment to fund special education should not depend on a family’s zip code; we have a moral obligation to support Darien’s special education students just as we support kids in our cities and other communities across the state,” said Tong.

Tong would also speak about how important structural reform was when it comes to creating this budget.

“We must now pass extensive structural reforms, including a cap on state bonding/borrowing, a priority-based budget process that focuses government investment in the most important areas of education, public safety and job creation, and mandate-relief to help cities and town negotiate for less costly services. And, after we just voted to save $24 billion through the state employee give-backs and concessions package, we need to vote on union contracts going forward,” Tong said. Tong also said he would not support the “mansion tax,” which as proposed is an increased tax on real estate transactions over $800,000.

Tong said that Darien’s local leaders have been vocal about changes, and he has heard them clearly. When it came to the structural changes described, Tong said, “Darien’s Town leadership have expressed many of these ideas to me, and I agree we need to pursue them.”

There is a lot that can still happen in the next few weeks, but with each passing day without budget, state services and aid levels will continue to be negatively impacted.