Conn. municipal leaders applaud budget

But tax increases draw other critics

By Susan Haigh
Associated Press / March 25, 2011

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HARTFORD — Leaders of Connecticut cities and towns are among the few groups who have publicly lauded Governor Dannel P. Malloy’s new budget, which has drawn criticism for a broad variety of tax increases.

Municipal officials said yesterday they are relieved the Democratic governor, a former mayor of Stamford, decided to fully fund many of the state grants to cities and towns, including the Education Cost Sharing Grant — the largest pool of state aid for local public education.

“This is the best budget I’ve ever seen,’’ said Mayor William Finch of Bridgeport, a Democrat who urged members of the General Assembly’s Appropriations Committee to “get behind the governor’s budget as much as you can.’’

A former state senator, Finch said Malloy’s proposed two-year, $40 billion plan does not include major reductions in state aid that would ultimately lead to higher local property taxes on homes and cars, something his struggling taxpayers cannot afford.

“This is a budget that was clearly prepared by a mayor,’’ said West Hartford Mayor Scott Slifka, also a Democrat.

But local leaders don’t like everything in Malloy’s plan, which is being scrutinized by the legislature’s budget and tax-writing panels. Catherine Osten, the Democratic first selectwoman of Sprague, said her small town of 3,000 would be hit the hardest in Connecticut proportionately by Malloy’s proposal to cut reimbursement to towns for not levying taxes on manufacturing machinery and equipment. Osten said Sprague would lose $400,000, or 5 percent of its annual revenue.

“We are a poor community in southeastern Connecticut that counts on this money,’’ said Osten, predicting her town, which has scrimped over the past several years to keep local taxes level, would have to close its library, senior center, and eliminate one of its remaining four public works employees.

“We haven’t bought a pen or a pencil or a paperclip in the last four years that I’ve been first selectman. We do whatever we can not to spend money,’’ said Osten, predicting the $400,000 cut would result in a two mill increase in property taxes. One mill equals $1 for every $1,000 of assessed property.

Representative Henry Genga, Democrat of East Hartford and a committee member, said Malloy and his budget chief have said they did not realize that about a 12 towns, including Sprague, would be significantly affected by the change in the payment in lieu of taxes program. He said the administration is working with the committee to find ways to help communities from raising taxes because of such a change.

By eliminating the program, Malloy would save about $48 million in his budget. The new governor is trying to plug a projected $3.4 billion deficit for the fiscal year that begins July 1.

Public officials said they favor most of Malloy’s plans to provide cities and towns more sources of revenue beyond the local property tax. Malloy has called for:

■ Allowing local property taxes on boats and planes.

■ Increasing the state’s hotel tax from 12 percent to 15 percent and sending 1 percentage of that increase to cities and towns.

■ Increasing the state sales tax from 6 percent to 6.35 percent on retail sales and sending 0.1 percent of it to cities and towns.

■ Raising the municipal portion of the real estate conveyance tax from 0.25 to 0.50 percent.

Finch said he wants lawmakers to make sure that if the final budget includes a higher sales tax, the revenue should be redistributed to the cities and towns with the most problems.

Henry also called on lawmakers to restore funding for the Small Town Economic Assistance Program, which provides state grants to help small towns pay for economic development, community preservation, and quality of life projects.