August 21, 2017

Mandate relief must accompany municipal-aid cuts

In an awkward press conference earlier this month, Gov. Dannel P. Malloy stood side by side with the top lobbyists representing Connecticut's cities and towns, who haven't been shy this year voicing their displeasure with the Democratic governor's proposed cuts to municipal aid.

Mayors and first selectmen, of course, would like to be held harmless in Connecticut's ongoing budget battle, but that should not and cannot happen. For years, municipalities have avoided funding cuts while taxpayers have shouldered two major tax increases and state government has been forced to trim costs.

It's time for cities and towns to pay the piper.

Few realize it, but municipal aid is the single largest state expenditure, accounting for about a quarter, or more than $5 billion, of the annual state budget, according to Malloy's office. Most of that money funds education ($4.1 billion) while the rest underwrites local governments.

If lawmakers are going to realistically avoid another tax hike, which seems unlikely these days, they will need to take money out of that pot of gold.

So, while much criticism and blame for the state's budget crisis has been focused on the cost of state government's workforce, we must take a deeper look into the spending of cities and towns.

The issue, however, is not black and white. Blindly cutting municipal aid without loosening draconian mandates and labor laws will be counterintuitive, giving municipal leaders little wiggle room to shave costs and forcing local taxpayers to shoulder the burden in the form of higher property taxes.

That would be another negative blow to the state's business climate and encourage more people to pack their bags for greener (or warmer) pastures.

Malloy has proposed cutting municipal aid by $476 million this fiscal year and recently announced millions of dollars in further cuts to many school districts in order to restore some funding for health and human services.

While we agree with the governor's cuts, they must be accompanied by true and meaningful municipal regulatory relief. Local governments, like the state, are hamstrung by generous and stringent union contracts that must be curtailed or renegotiated if we are to find true financial savings.

For example, it can be difficult to regionalize and consolidate the costs of certain services because employees are protected by collective bargaining.

There are also plenty of costly state mandates cities and towns are forced to comply with that must be reformed.

Municipalities have long argued for curtailing the state's prevailing wage law, which requires municipalities to pay a certain level of wages and benefits on new construction projects.

In January, during the very early days of this year's prolonged budget debate, Malloy did offer some reforms.

For example, his initial budget proposed to increase the prevailing wage threshold for the first time since 1991 to $1 million for new construction and $500,000 for remodeling and to eliminate the requirement for superintendents in small school districts and communities.

Those are meaningful first steps, but we haven't heard much about them actually becoming reality. A major challenge, of course, is that teacher and municipal labor unions are a major and influential special interest at the state Capitol.

The state should reduce funding to municipalities but that burden shouldn't simply be transferred to local property taxpayers. Municipal leaders need and must be given more flexibility to manage and control their costs.

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