Gov. Ned Lamont defended his track record on municipal aid Tuesday, arguing that cities and towns have benefited greatly during his six years in office.
The governor, a fiscally moderate Democrat who took office in January 2019, highlighted big growth in non-education aid, grants that allow local education spending to exceed the national average and a new community investment program that pumps hundreds of millions of dollars into the economies of Connecticut’s poorest communities.
But the governor didn’t mention that some increases happened despite his best efforts to scale them back. He also didn’t note that he tried to shift part of the cost of teachers’ pensions — a hefty burden the state made far worse by failing to save properly for seven decades — onto the backs on municipal taxpayers.
“My budgets prioritized significant municipal aid investments because that funding is about more than ensuring our unique towns and cities are incredible places to live, but because that funding supports our children’s education and gives them the best opportunity at the starting line in life,” Lamont said.
Since Lamont took office, statutory grants to cities and towns for non-education purposes has doubled, growing from $347 million to $681 million, according to state budget records.
A big driver of that increase involves the PILOT grants — an acronym for Payment In Lieu Of Taxes — that reimburse communities for a portion of the revenue they lose because property owned by the state or by nonprofit colleges and hospitals is tax-exempt. Communities received $165 million in PILOT funds in 2019 and are slated to get $339 million this year, according to budget reports.
The governor also approved a new borrowing program in 2021, the Community Investment Fund, which has invested more than $400 million, largely in economic development projects in the state’s distressed municipalities. And the governor wants to invest another $350 million in these communities over the next two fiscal years.
The investment fund was a compromise between Lamont and liberal Democrats. The latter wanted to raise funds for poor communities by boosting taxes on wealthy households and major corporations. Lamont, who was a Greenwich businessman before becoming governor, consistently has opposed such efforts, arguing it would prompt rich families and major companies to flee the state.
Lamont also touted his track record with local schools. Two years before he took office, lawmakers enacted a plan to boost the Education Cost Sharing program, the largest state grant backing K-12 districts.
Lamont has signed budgets boosting ECS funding 17% since 2019. Connecticut’s per-pupil spending of $22,000 is among the top five states in the country, well above the national average of $16,665, the administration said.
And in the $55.2 billion budget he proposed in February for the next two fiscal years, Lamont recommended another $85 million for ECS and a $40 million increase in special education aid assistance to begin in the 2026-27 fiscal year.
The governor also proposed creation of a new $300 million universal pre-kindergarten endowment to expand access to child care and other early childhood development programs.
The goal, Lamont told legislators in his annual budget address last month, is to provide pre-K and preschool program slots at no cost to all Connecticut families earning $100,000 or less annually, “saving parents thousands of dollars and giving them the freedom to get back to work.”
Municipalities: Lamont’s record with towns isn’t rosy
But the Connecticut Conference of Municipalities says those are selective highlights of a picture that isn’t as rosy when viewed in its entirety.
CCM says communities lose more than $400 million annually because overall state aid to school districts hasn’t kept pace with inflation.
Lamont tried last year to scale back a planned increase in municipal education grants by $39 million, but legislators wouldn’t go along with it.
And while he proposed boosting special education grants by $40 million two years from now, legislators decided last month that local schools were facing a funding crisis and couldn’t wait.
Lamont vetoed their bill to appropriate the $40 million extra immediately, noting state finances were on pace to close the fiscal year beyond the constitutional spending cap, which keeps appropriations in line with household income and inflation.
The governor ultimately compromised and agreed to send schools the $40 million now via an off-budget account, outside the spending cap system — an accounting gimmick he has decried in the past.
“Local leaders are being asked to do more with less, and the state’s leadership needs to be honest about the challenges our communities face,” CCM Executive Director and CEO Joe DeLong said. “It’s time for real solutions that provide stable, predictable and sufficient funding for our cities and towns, not just political talking points.”
CCM’s Foundation for Youth recently launched an online ad urging voters to side with legislators and their communities.
The foundation is a coalition that includes: the Connecticut Business and Industry Association; the Connecticut Education Association; the United Way of Connecticut; the School and State Finance Project; and Domus Kids, a nonprofit youth development initiative.
DeLong also noted that the PILOT system, despite its growth, only provides about 50% of the funding required by the state’s own formula. Governors and legislatures for decades have routinely waived the formula requirements and simply provided communities with a lesser amount.
CCM estimates cities and towns have lost $19 billion in property taxes over the past decade as more land and buildings are acquired by nonprofits.
Lamont vetoed a 2023 measure that would have raised communities’ share of the video slot revenues Connecticut receives from tribal casinos from $51.5 million to $139.4 million. The latter roughly matches the level awarded to municipalities prior to legislative cuts in 2014.
And municipalities still are smarting over a 2019 Lamont proposal to bill them for a portion of the state’s required annual contribution to the teachers’ pension fund. Legislators also blocked this plan, which would have cost cities and towns $73 million during Lamont’s first two years combined.
A 2015 analysis by the Center for Retirement Research at Boston College found governors and legislatures that served between 1939 and 2010 left Connecticut billions of dollars in debt by failing to adequately save for pensions promised to municipal teachers and to state employees. By not saving properly, governors and legislatures deprived the state treasurer of huge assets that otherwise could have been invested and generated billions of dollars in revenue over those seven decades.
Lamont inherited this problem. His budget office estimated last fall that Connecticut entered this fiscal year with $35.1 billion in unfunded pension liabilities still unresolved, including almost $16 billion tied to the teachers’ pension.
This article first appeared on CT Mirror and is republished here under a Creative Commons license.
