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Municipal Leaders Make Pitch For More State Aid

DON STACOM

April 09, 2009

Property taxes are likely to rise for huge numbers of Connecticut residents this summer, and city and town leaders warn of worse news ahead if state lawmakers tear even deeper into municipal aid.

Stunned by the possibility that the Democrat-dominated General Assembly might cut millions from Gov. M. Jodi Rell's aid proposal, more than 200 municipal leaders packed a hearing room Wednesday at the Legislative Office Building to make their case.

"My city laid off 67 employees in the last month, and 124 more layoffs are scheduled in June. These state aid cuts will make a bad situation worse," New Haven Mayor John DeStefano said.

"We've cut the budget, we've cut jobs — we've done all that. But we're going to have to have a tax increase that nobody wants," Hartford Mayor Eddie A. Perez added.

Municipal leaders acknowledged that every year during budget-setting season, they try to get bigger allotments of state aid — often citing the same arguments each time. But amid the nationwide economic meltdown, the situation is far more dire, they said: Their regular revenue sources are drying up, and state law blocks them from raising money through anything except property tax increases.

"We're talking about fewer services, laying off people, raising taxes. But the idea that we can continue to squeeze the citizens of Connecticut, push them further and further with the most regressive tax — we need a little sanity in this discussion," Stamford Mayor Dannel Malloy said.

The mayors renewed their call for the power instead to levy new taxes, such as a hotel tax or a 1 percent local sales tax. DeStefano said that a local sales tax could generate $550 million to $600 million a year.

"The hotel tax would be paid by out-of-state people — it's a no-brainer. And the local-option sales tax has been on the table for a long time," Malloy said. "But the state is saying, 'We're not going to give you what we promised and, by the way, no new tools in your toolbox will be allowed.'"

The Connecticut Conference of Municipalities released a survey of 121 communities showing that 71 percent plan tax increases if Rell's budget goes through unchanged; that figure would rise to 88 percent if Democratic lawmakers order further cuts. More than half of the communities plan layoffs, and that figure would jump to 80 percent if state aid falls further.

The Democratic big-city mayors avoided criticizing their municipal labor unions or the General Assembly's Democratic leadership.

But New Britain Mayor Timothy Stewart, a Republican, said that he has had difficulties with some unions, "and my employees will be hurt by that." Stewart has already cut the city's budget significantly, and is prepared to order more staff cuts if necessary.

"If I raise taxes, that's the doorway for me," he said.