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Gov. Malloy Offers Towns Flexibility On Budget Timing; They Seek More Revenue Sources

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Governor Dannel Malloy and Democratic leaders in the state legislature have written to municipal leaders in Connecticut to offer flexibility on their budget timetables in the face of potentially big changes to state aid.

Many towns had complained that they have to finalize budgets as early as this month, without full clarity on the state budget, which doesn't typically wrap up until late May or early June.

Malloy's budget proposal takes aid from richer towns like Greenwich and Fairfield, while offering potentially more money to big cities like Hartford, New Britain, and Bridgeport.

Democratic leaders' letter to the Connecticut Conference of Municipalities said, "we have heard and understand the anxiety expressed by local leaders over the timing of municipal aid assumptions and budget adoptions."

It goes on to say, "we believe that providing municipalities a chance to have more concrete information on state-provided aid before making local decisions is a reasonable and appropriate measure to explore together." The letter offers to work on changing statutes which mandate budget timetables.

CCM welcomed the offer to delay finalizing budgets until there's more certainty at the state level.

"Property taxpayers deserve budgets that are transparent and adequately cover expenses for the upcoming year," said Joe DeLong, CCM Executive Director, in a statement. "Without complete information, we risk either over-taxation or having to send out a separate, additional rate bill mid-year. Neither of these options reflect good government."

"While details have to be worked out, it is encouraging that the governor and legislative leaders also recognize this challenge and are willing to work with CCM and our members to determine if there is a better path forward for Connecticut taxpayers," he said.

Meanwhile, cash strapped municipalities are asking for changes to the law so that they can generate revenue in new ways. Long dependent on the property tax, many now say the system is outdated and failing, particularly as the state moves to make changes to its own municipal aid.

One bill would allow towns and cities to choose to levy a local sales tax as a way of raising money. But Hartford Mayor Luke Bronin told legislators that the bill as it's currently written would actually make cities like his less competitive.

He wants a statewide effort to divert a portion of the sales tax to municipal aid. "If you have neighboring towns where one city that is already facing fiscal challenge is forced to avail themselves of the local option and raise their sales tax, that can simply exacerbate the uncompetitiveness of that community," he told lawmakers.

Some cities are concerned about the amount of land that’s currently non-taxable, because it’s used by non-profits. That’s the case for almost 50 percent of New London’s property. Mayor Michael Passero is backing a bill that would allow the city to negotiate property tax on any expansion of non-profits in the city.

"You can't allow our tax base to be eroded any further and expect us to survive," he said. "Tell me how we can continue to provide services if our tax base keeps getting eroded as more organizations take advantage of that exemption, and the remaining taxpayers can no longer bear the cost."

The mayors were giving testimony before the Finance, Revenue and Bonding Committee last week.

Harriet Jones is Managing Editor for Connecticut Public Radio, overseeing the coverage of daily stories from our busy newsroom.

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