Following state budget veto, massive cuts to town aid loom

The budget impasse that has brought the state to a grinding halt continues to impact towns and cities across Connecticut. As the deadline to pass a budget was in July, and no budget was passed, Governor Dannel Malloy is currently running the state finances via executive order. While representatives from both parties have said that this is far from the ideal way for the state to be run and that a budget must be completed, as of Oct. 2 there is still no budget in place.

Republican legislators put forth a budget weeks ago and on Sept.16, in an extremely surprising turn of events, Democratic senators broke with their party and supported the GOP budget. Paul Doyle, Gayle Slossberg, and Joan Hartley were the three senators to defect and support the GOP proposed budget. Following that, five democrats in the house defected as well and endorsed the budget, sending it to the desk of Malloy for approval.

Malloy vetoed that budget, despite it receiving an, albeit small, measure of bipartisan support. The GOP budget has substantial cuts to UConn in amounts reportedly as high as $300 million, along with changes to pension contributions for state employees that Malloy believes could be illegal. A unilateral change to a collectively bargained contract is something that one would reasonably expect to be followed by lawsuits from labor unions.

On Tuesday, the House was called into session to look at overriding the veto from Malloy. It would take 29 House Democrats to vote along with the GOP to override the veto, which is a longshot given that only five voted for the budget originally. Republicans would need six votes in the Senate to overturn the veto, and only three senate democrats voted for the budget.

The lost revenue for municipalities as the state continues without a budget is now over $400 million.

However, the session came and went without the call for a vote. Only a house member who voted for the budget could call a motion to override the veto. Republicans and the Democrats who supported the budget refused to make the motion, so the veto was not debated and voted upon. The expectation was that there was more than enough support in the house to uphold the veto.

To make matters worse, municipal aid payments would typically start being dispersed in early October. However, in late August, Malloy put forth an executive order that contained massive cuts to municipal aid. The Education Cost Sharing Grant, which provides money to districts across the state, is being redistributed. ECS money is distributed in three payments, with 25% of the grant money coming in October, 25% coming in January, and the remaining 50% of the money in April. The draconian cuts to ECS are now becoming a reality, as the executive order goes into effect when the first of the ECS payments is made, which happens on October 1.

The 30 lowest performing districts will receive their full aid amount. Darien and 85 other towns in Connecticut will see the ECS money drop to nothing, and the other 54 cities and towns will see reductions between 10% and 60%. The order cuts ECS funding statewide by 28%. The state will issue just over $360 million in ECS money as part of that first payment. Last year that number was $500 million. ECS funding typically is determined via a legislated formula. But with no budget, there is no formula to follow.

Darien budgeted to receive no ECS money, as a cut of this magnitude has been expected for some time for wealthier towns. But other towns across the state that are less affluent than Darien rely on the ECS money that now will not be coming. The Connecticut Education Association says it will file an injunction to prevent Malloy’s order from being carried out until it is determined if the order is even actually legal. Torrington is one town acting as a plaintiff in the suit, as with the cuts that are coming as part of Malloy’s order, the town would have to deplete its entire reserve fund and still face an $11 million budget deficit. Torrington was to receive $8 million in ECS money, but now will receive only $1.2 million. Should the order be upheld, Torrington and other towns like it would have to consider cuts to education programs, teacher layoffs, hiring freezes, and other measures.

Darien First Selectman Jayme Stevenson spoke on the Connecticut Conference of Municipalities Facebook page about the budget impasse, the veto, and what it could mean for Darien. “On September 16, we were all really hopeful, a bipartisan budget passed both the house and the senate, giving struggling cities and towns hope that they would see much needed relief, and laying the groundwork to move the state forward,” Stevenson said, adding the caveat that, “it wasn’t a perfect plan by any means, but it supported key services, and limited tax increases.”

“There is so much at stake for Connecticut the longer we suffer without a budget plan,” Stevenson said.

With the veto override failing, the impasse continues. Lawmakers say they will continue to work with the Governor to come up with a budget as soon as possible, but until that day comes, municipalities across the state will continue face financial uncertainty.