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Ease Cities' Plight

Courant Editorial

May 04, 2008

What do Eddie Perez, John DeStefano, Bill Finch and Dannel Malloy have in common? Well, yes, each is a mayor of one of Connecticut's largest cities.

More to the point, they are brothers in misery caused by choices each must make in the absence of sufficient aid from the state. They are choosing between laying off more employees and drastically cutting local services, or saddling homeowners and businesses with even higher property taxes.

The mayors are bitter over what they see as a cavalier dismissal of their concerns by state legislators and Gov. M. Jodi Rell — and they have an argument. They believe the decision announced Friday by Mrs. Rell and leaders of the General Assembly to take no action and default to the scheduled second year of the biennial budget adopted in 2007 will lead to a fiscal disaster for cities.

This so-called "do-nothing" budget will provide an increase of only $70 million in state aid to municipalities over the current year — not nearly enough to deal with much higher energy, health, payroll and other costs in 169 cities and towns, say the four mayors.

Mr. Perez is already asking for a 10 percent tax increase in Hartford and says the capital city will have to endure an even higher property tax hike or he will have to further cut services and the payroll. That would delay needed fire and police department classes. High property taxes have already driven many middle-class homeowners out of the cities. Without relief, many more might flee. That indeed would be a disaster.

Bridgeport faces a 9 percent tax increase, and Mr. Finch is cutting 110 positions and slicing his library budget in half. "We're making tough cuts; the state should meet us halfway," he pleads.

"This governor and the legislature refuse to recognize our crushing tax burden," says Mr. Malloy of Stamford, who fears his city will receive fewer dollars from the payment in lieu of taxes program than it did last year.

Mr. DeStefano of New Haven, who complains of "complicity" by the governor and lawmakers in driving up municipal costs without paying for them, says state legislators "are focused on getting out of the building ... and going home to get re-elected."

It's not unusual for local officials to complain about what they see as insufficient state aid. And although each of these mayors could probably find more ways to economize, we understand their frustration. Connecticut's municipalities are far too dependent on the property tax to pay for local government operations and the schools. Residents of this state pay close to the highest property taxes in the nation. It's bad for homeownership and bad for business. The large cities have major education and social service costs and not enough taxable property. So the mayors have to go hat in hand to the legislature. There needs to be far-reaching reform.

For next year and thereafter, the state should fully fund the state's statutorily promised payments in lieu of taxes, known as PILOT, to municipalities. That's money in place of tax revenue from hospitals, colleges and state-owned buildings that the cities can't legally tax.

The PILOT program is now only partially funded. The higher PILOT payments — some $70 million in addition to what's provided now — would act as property tax relief.

The legislature's Appropriations and Finance committees passed bills this year to do just that. These should be revived and passed in 2009. Meanwhile, lawmakers should find a way to help the cities this year while they work out a permanent full-funding mechanism for PILOT. Municipalities need the help and Mrs. Rell and state lawmakers know it.