Connecticut’s cities and towns are calculating the potential cost of Governor Dannel Malloy’s budget proposal. The governor included major changes in the way the state disburses municipal aid, as well as shifting part of the cost of teachers’ pensions to towns.
Large cities like New Britain are slated to benefit from the proposal to the tune of $28 million. But part of that increase is supposed to come from imposing a property tax on hospitals, and the city will lose money from other funding areas.
Mayor Erin Stewart told WNPR’s Where We Live that once she foots the $7.5 million bill for teachers’ pensions, she may not end up ahead.
"The unfortunate reality is that sure -- could I pay for that? Yes," she said. "But I could only pay for that out of my rainy day fund for one year. It's a one-time shot. And then the following year, there's no way I would be able to make that payment."
Smaller, wealthier towns like Fairfield will see cuts in state aid.
First Selectman Mike Tetreau said his town could lose more than $14 million – the equivalent of imposing an eight percent increase in property taxes.
He’s hoping the legislature will make changes to the governor’s proposal, but he said even that may not help in time.
"We're going to finalize our budget at the end of March. This is the best available information we have," he said. "To hear in June that it will be different really puts us in a quandary, in a position of potentially significantly overtaxing our residents."
Tetreau said making towns rely more heavily on property taxes will hurt seniors and small businesses, and damage local economies.
