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Leaders Seek OK For New Taxes, Regional Solutions

Budget Dilemmas

DON STACOM

January 06, 2009

Recognizing that more state aid in the next fiscal year is highly unlikely, municipal leaders converged on the Capitol Monday to propose a different solution — levying local taxes.

They also called on lawmakers to suspend costly state mandates and said they were willing to trade some local autonomy for cost savings.

With the General Assembly ready to begin what promises to be a long and bruising budget-setting session Wednesday, the Connecticut Conference of Municipalities brought together leaders of tiny rural towns, debt-laden big cities and historically affluent suburbs to make a pitch for help.

Financially battered Bridgeport issued the most dire warnings.

"We're bleeding. We're fighting for our survival," Mayor William Finch said.

After cutting the city budget by 20 percent and axing more than 200 jobs, Finch still faces an estimated $20 million deficit.

"Bridgeport is a couple blizzards away from bankruptcy," he said.

The state's larger cities are often short of cash, but this year is far different, Middletown Mayor Sebastian Giuliano said. The crushing recession threatens everybody, and wealthier communities must recognize that mid-size cities are edging toward crisis, Giuliano said.

"We don't have the same problems," he said. "But if Middletown, East Hartford, West Hartford, Meriden and Bristol get into that same boat, how are we ever going to solve the problems of New Haven, Hartford and Bridgeport?"

Unlike their usual plea for more state grants, municipal leaders are asking for permission to create new taxes, with the money going directly to communities or regions.

CCM leaders want Gov. M. Jodi Rell and the General Assembly to authorize towns or regions to create taxes, most likely on hotel stays, or a half-percent surcharge on local retail sales. Current state law blocks towns from such taxation, restricting them to collecting property taxes that already pay for most municipal spending. Communities also levy fees for beach passes, building permits and the like, but those generate little revenue.

"We know this — things can't continue to go the way they're going now," Simsbury First Selectman Mary Glassman said.

Municipal leaders fear that rising expenses and plummeting revenue will crush their budgets. The state's projected $6 billion deficit over the next two years is likely to drive the General Assembly to trim or slash aid to towns. At the same time, communities won't be able to make up those losses because property owners will balk at tax hikes in the midst of a devastating recession, municipal leaders said.

Incoming House Speaker Christopher Donovan, D-Meriden, didn't attend the municipal leaders' gathering, but said later that everything is on the table.

"This year we're open to all kinds of ideas. We know the plight of the towns and cities. We understand their need to raise some [new] funds if they're not getting them from the state," Donovan said.

CCM also is asking lawmakers to allow groups of towns to negotiate labor contracts regionally and to more efficiently share services and buy equipment.

"In my area, we bought a truck for seven towns to share — and we had to use seven different lawyers, go through seven approval processes," Glassman said. "That's all based on local charters. The legislature could fix that quickly just by passing enabling legislation."

Several mayors conceded that the state previously encouraged regionalization, but ran into resistance from local allegiances to home rule.

"It's usually a governor and legislature pushing for home rule. This time, we're saying we understand we have to give up some autonomy to get more efficiencies," Glassman said. "Now the legislature and the governor need to get on board."