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September 22, 2019Cart

Business

by Fairfield County Business Journal
by FCBJ

CT municipalities detail woes in face of budget impasse

As requested by Gov. Dannel Malloy’s Secretary of the Office of Policy and Management Benjamin Barnes, Fairfield County municipal leaders have provided updates about their economic health in the face of the state budget impasse.

The responses have not been overwhelmingly positive.

Malloy’s latest budget proposal would reduce state resources for municipalities by $476 million, or 19 percent, this year.  House and Senate Democrats and Republicans have continued to wrestle with the issue; the state has been operating without a budget since midnight on June 30.

Barnes recently asked local leaders to report how much they have in their reserves and what impact the budget impasse has had – and, if it continues, may have in the future – on their communities.

While not all cities and towns have yet to respond, those who have paint a negative, sometimes chilling picture.

Bridgeport’s Budget Director Nestor Nkwo wrote that the city’s general fund budget will end its fiscal year with a $26 million deficit, noting that the city has one of the highest tax rates in the state and that every city council member is against further increasing mill rates.
“Bridgeport General Fund and Board of Education are in desperate need of $27 million and $15 million, respectively, in FY 2018, or a total of $42 million,” Nkwo wrote.

Newtown First Selectman Pat Llodra called the state’s proposed cuts “draconian” and that “they may set us on a downward spiral.”

“We cannot help but feel that our strong efforts over the past few years to gain solid financial footing, grow our fund balance, and reduce debt will serve us badly – that we are going to be punished, not rewarded, for our good behavior,” Llodra wrote, adding: “To harm Newtown and other municipalities in this fashion almost guarantees that CT’s downward slide will continue.”

Norwalk Director of Finance Robert Barron reported that since 2015, the town’s reserves not already dedicated to certain projects have increased from $42 million to $52 million this fiscal year. If Norwalk loses state aid, Barron said, the reserves “would be reduced by the amount of the cuts.”

Fairfield’s brief response said that it was implementing a hiring freeze, putting townwide spending on hold and reducing library hours.

Bethel Town Comptroller Bob Kozlowski wrote that the town cannot rely on its $11.9 million in reserves to cover cuts in state funding, as that money is needed to cover the “tremendous need” for construction projects.

“Needless to say, any cuts by the state, in education funding will have a disastrous effort on the needs required to maintain the current standard of living for our residents,” he wrote.

Easton First Selectman Adam Dunsby wrote: “I trust that you are not asking simply to determine how much you can take. Easton has made tough decisions to remain fiscally sound. We should not be punished for being responsible.” He added that for every dollar Easton sends to the state, it gets back 3 cents.

Redding First Selectman Julia Pemberton called Malloy’s proposal “an outrageous approach to governing. The governor has said in the past that he opposes tax increases in this budget, and yet, the proposed scale of reductions to municipal aid will force municipal leader in many towns to do just that, or to make drastic cuts in services.”

“What does Redding receive in municipal aid for every dollar paid in income taxes? Pennies,” she said.

Darien, Greenwich and Monroe simply supplied numbers in response.

Among the municipalities yet to respond are Stamford, Trumbull, Shelton and Danbury; the Republican leaders of the last three are running for governor.