Last week, Gov. Dannel Malloy unveiled his alternative budget, which would be his plan if state union workers do not agree to . Local officials hated it.
Malloy’s plan, which mirrors the approach used by New York Gov. Andrew Cuomo, balances the budget by cutting $1 billion of municipal aid to towns. The plan just shifts the burden from state taxes to property taxes and doesn’t address the bigger spending issues, First Selectman Dan Steward said.
“It is not the most fair of proposals,” he said.
The plan would take $807,583 of municipal aid from Waterford. Because , it wouldn't be as affected. New London, for example, would stand to lose $11.53 million in state funding.
“It helps that we are not very dependent on the state to begin with,” Board of Finance member J.W. “Bill” Sheehan said. “While other towns are facing unmanageable losses, this is a cut we could possibly manage.”
Malloy did not specify where the cuts to municipal funding would come from, but many town officials said it would probably be to the Education Cost Sharing grant. ECS funds are the largest grant the state gives to towns and generally the first cut, Superintendent Jerome Belair said.
If the ECS funds are cut and the school district has to make do with less, it would certainly have to lay off additional personnel, Belair said. The district already made more than in cuts to the operational side of the budget, and there is nothing left to cut but people, he said.
“It would impact staffing levels, no question,” Belair said.
In Connecticut, there are 2,500 fewer teaching positions than there were three years ago, Belair said.
The state originally promised to fund 50 to 60 percent of education, Steward said. That number is about 40 percent across the state, and less then 10 percent of Waterford’s budget, he said.
Malloy’s budget will not be approved until the summer or possibly later, Sheehan said. Meanwhile, the RTM has to approve the budget in the first week of May, and once its approved it is final, he said.
Later in May, the Board of Finance will have to set the tax rate. If the town feels like Malloy is going to cut $800,000 from the budget, it will have two options to balance the budget, he said.
First, the board could take the money out of the general fund to balance the budget, which could affect the town’s bond rating, Sheehan said. The other is to set the tax rate higher than expected, from a 4.5 percent increase to approximately a 6 percent increase, Steward said.
The board of finance would probably lean to taking the money out of the general fund, and ask all directors to be tight on their budget, Sheehan said. If possible, the town could come in under the $800,000 and avoid taking out any money out of the general fund, Sheehan said.
Next year, though, the town would expect at least $800,000 less in funding. That could mean the layoffs would be next year and not this one.
Political Reasons For Releasing Plan B
Plan B seems like a “realistic alternative,” said Sheehan, who worked on Malloy’s campaign. But releasing it could be for political gain as well, he said.
The governor is trying to get the state unions to agree to $2 billion in concessions over the next two years. By saying he is going to cut municipal aid, it could turn the town union workers against the state union workers, Sheehan said.
If municipal aid is cut, more town union employees will be laid off, and it would be harder for them to negotiate raises. By releasing this plan, unions will force pressure on other unions, he said.
“It could pit them against themselves,” Sheehan said.
Still, it would not be surprising to see state unions refuse the concessions and allow the layoffs, something that has , Sheehan said.
“As my union brethren have told me, unions don’t give back,” Sheehan said.