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Cities Relieved That Rell's Grant Cuts Weren't Worse

DON STACOM

February 08, 2009

In any other year, school administrators and city officials would be deriding Gov. M. Jodi Rell's proposed budget as a meat-ax assault against education and local government.

This year, most of them are welcoming it.

Instead of the customary annual increases in state grants, nearly all of Connecticut's communities — wealthy and poor, Republican and Democratic — will suffer grant cuts under Rell's plan.

Hartford, Danbury, West Haven and three suburbs would gain a little ground, but the other 163 towns and cities would lose. State aid is slated to drop by more than $2.3 million in Bridgeport and $2 million in New Haven. Rural northwest corner towns are in line to sustain some of the biggest losses of all; Warren, with just 1,384 residents, is about to lose nearly 20 percent in state aid.

But against the backdrop of a global economic crisis and viciously bruising budget cuts in Massachusetts and New York, Rell's offer is surprisingly generous. And a promise of relatively steady state aid over the next two years has municipal leaders and educators in deficit-plagued Connecticut deeply relieved, and in some cases nearly jubilant.

"We're ecstatic," said Bristol Mayor Art Ward, even though his city stands to lose $410,000 in state grants in the next fiscal year.

After anticipating crippling rollbacks of up to 20 percent in education aid when the new fiscal year starts in July, leaders in most communities were relieved to see Rell proposed no cut in the largest education grant, Education Cost Sharing.

"She didn't try to solve the state's problems on the back of the local communities," Plainville Town Manager Robert E. Lee said.

ECS grants bring in huge amounts that keep local budgets afloat; it's not uncommon for blue-collar suburbs to pay 20 to 40 percent of the education costs with state dollars, and the percentage among the poorest cities is much steeper.

So Rell's decision last week averted potential crises in dozens and dozens of communities. One immediate result: The municipal lobbying groups that often rip into governors' budget proposals were instead serving up praise. The Connecticut Conference of Municipalities used the words "applauds" and "lauds" three times on the first page of its written critique.

"Connecticut's small towns and cities are facing a brutal budget year and significant cuts in state aid would have been a crushing blow," said Bart Russell, executive director of the Connecticut Council of Small Towns, a group that lobbies for rural communities and small suburbs. "The bar was set low this year; people were worried. So our directors know that this couldn't be a business-as-usual set of expectations."

Relief, though, isn't equating to contentment.

Municipalities are already turning to their legislators to try to shave some losses, or rework aid-allocation formulas to bring them more revenue.

Communities that host huge state-owned, tax-exempt properties, for instance, are campaigning to restore the money that Connecticut pays in place of taxes. Rell chopped back that account, along with the Town Aid Road Fund, a traditional favorite of lightly populated towns with extensive road systems to maintain.

"It's already been under-funded. And at some point, you reach a point of no return," said First Selectman Ruth Epstein of Kent, which would lose about $35,000 in road aid funds. That money would be insignificant to a big city, but is huge to a town with a small tax base but big road network

"Years ago we let our infrastructure go, we kept cutting back — and then we had to pay lots to play catch-up," Epstein said. "At some point, you're really not saving money anymore."

House Speaker Christopher Donovan is already hearing from towns and cities that want funding restored, and he anticipates more calls ahead.

"They're saying, 'We saved ECS, but we're short here or we're short there,'" Donovan said. "The legislature is going to be getting together to see what we can do for municipalities."

West Hartford Mayor Scott Slifka is still working on next year's budget, but is looking ahead to the challenge after that: 2010-11, when towns will go the second year in a row with no increase.

"You've got to take a multiyear approach. In the second year, unemployment will be higher, some residents will have less ability to pay their taxes, but we'll have even more demand for government service," Slifka said. "And the governor's budget is using an incredible amount of one-shot revenue — but we haven't fixed the structural deficit in the state."