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State Aid: Local Budgets Handcuffed

Hartford Courant

March 05, 2009

Municipal budget planners must feel like they are writing with invisible ink. Or is it just red? There's no good way to predict how much of the usual state aid will be coming from Hartford when the new fiscal year begins July 1.

Uncertainty over how federal stimulus money will be funneled to the cities and towns adds to the woes of trying to keep schools running, roads plowed and senior centers operating without clobbering property owners.

Local budget deadlines begin arriving in March and generally pass well before the state budget is settled, even in a good year. Towns must send layoff notices to teachers and make other adjustments for spending in a kind of black-box budgeting.

In this particularly difficult year, state leaders should move more quickly to end their political posturing and give municipalities a good idea of how much money will be sent from the Capitol.

Republican Gov. M. Jodi Rell is trying to achieve fiscal solvency with budget cuts, re-allocation of funds and elimination of some tax credits. Her proposed budget keeps the state money flowing to local schools at the same level as last year.

But she would reduce payments to towns and cities in lieu of taxes for state property, colleges and hospitals. Also dropping are funds for town and road aid, and distributions from the state's casino revenue.

But even this level of certainty is thrown into question because the leaders of the Democratic-controlled General Assembly have, so far, failed to clearly articulate their budget goals. They say the deficit numbers used by the governor are too low, which reflects their apparent desire to raise taxes to cover the shortfall.

Dispassionate observers generally agree that the state budget for the next two years will ultimately have to be balanced with a combination of budget cuts, tax increases, federal aid and a dose of smoke and mirrors.

Until the governor and legislators finally get serious about compromise, which feels like it's months away, they do a disservice to the state's municipalities by failing to provide guidance on how much money cities and towns can expect.