The Budget Hangover: Sober After Suds

Wednesday brings a new governor and a new General Assembly. Reality is waking up after a $175-a-head inaugural ball and staring down a $3 billion projected budget deficit. Get ready for a combination of tax increases and budget cuts. The biggest item municipalities want spared in this state budget session is the Education Cost Sharing formula. But happens when they save this and cut that? A city such as Bridgeport wants every penny it can get from the state. Keith Phaneuf, budget-guru scribe for the CT Mirror, writes …

Connecticut’s cities and towns made it clear Monday they’re guarding against the traditional shell game state government has employed in past fiscal crises – shielding assistance in high profile programs while stripping funding from lesser ones.

And this year’s game has a new wrinkle after many state officials campaigned this past fall on a pledge to expand communities’ powers to levy new local taxes and fees. While municipal leaders favor increasing local revenue-raising options, they also fear this also will lead to cutbacks matching amounts, or more, in state assistance. This would effectively transfer both a portion of the state budget deficit and the political heat that comes with tax hikes to the local level.

“Despite the state’s serious budget troubles in 2011, cuts in municipal aid will only shift the state budget deficit to already hard-pressed local governments and their property taxpayers,” James Finley, executive director of Connecticut Conference of Municipalities, said.

The chief lobbying agency for Connecticut’s 169 cities and towns, CCM unveiled a legislative agenda Monday aimed at preserving the $2.9 billion municipal aid package in the current state budget and expanding communities’ abilities to levy new taxes and fees.

Gov-elect Dan Malloy has pledged not to reduce the single-largest municipal grant, the $1.9 billion Education Cost Sharing program, even though nearly $271 million in emergency federal aid propping up the ECS program this year will vanish in 2011-12.

Preserving ECS funding at local levels topped the CCM legislative agenda released Monday.

But CCM spokesman Kevin Maloney said that shielding ECS while cutting non-education grants doesn’t necessarily guarantee local school systems won’t be harmed. “It all goes into one big (local) pot in the end and it’s going to be problematic,” he said.