Shark Attack On State Municipal Support Could Bite City Taxpayers

CT Mirror reporter Keith Phaneuf is the John Marshall Lee of Connecticut scribes. He relentlessly pursues, reviews, analyzes and asks questions about state budget items while Lee, a regular OIB contributor, does this on a local level as watchdog of the city budget. Connecticut Speaker of the House Brendan Sharkey, in a story written by Phaneuf, says a new set of jaws may take a bite out of state support of municipalities this legislative session, something that could impact taxpayers in the state’s largest city. Bridgeport’s budget relies hugely on state funding. Mayor Bill Finch, grab a harpoon! From Phaneuf:

For years, ideas such as regionalizing school calendars, reforming special education funding and other proposals to trim the cost of local government were given brief discussions at the state Capitol–though nothing more given to their controversial nature.

But since Connecticut’s cities and towns may have to get by with less state funding in the next budget, the time for delicately avoiding politically sticky cost-cutting ideas is over, House Speaker J. Brendan Sharkey pledged Thursday.

House Speaker Brendan Sharkey says Connecticut needs to “fundamentally change” the way it funds local governments.

Addressing more than 100 state and municipal leaders and social service advocates at a state budget forum at the Capitol, the Hamden Democrat said the days of being able to hold cities and towns completely harmless while dealing with the state’s fiscal woes likely are over.

“We have to fundamentally change the system by which we fund our local government,” Sharkey told the crowd at the forum sponsored by Connecticut Voices for Children.

The Hamden lawmaker, who was elected earlier this month to his first term as speaker, noted that the General Assembly and Gov. Dannel P. Malloy “did not balance the budget on the backs of cities and towns” two years ago when facing a state budget deficit of historic proportions.

The biennial budget he and the legislature adopted in June 2011 not only spared all municipal aid from cuts, it immediately gave municipalities a share of sales and real estate conveyance tax revenue worth about $50 million per year and increased the Education Cost Sharing grant by $50 million starting in 2012-13.

But that budget also increased state taxes and fees by $1.5 billion.

And with a sluggish economic recovery limiting revenue growth and pushing up demand for social services, analysts estimate state finances are headed for a $1 billion-plus deficit in the next fiscal year unless changes are made.

Both Malloy and Sharkey have said, given the recent big tax hike, another further state tax increases must be considered only as a last resort.

The two leaders also have warned cities and towns that municipal aid may not be spared from the budget axe this time.

Read more here.