Malloy’s office asks Milford, all state municipalities, for financial information

The state continues to go without a budget, as legislators work on proposals following the acceptance of labor concessions in last week’s SEBAC deal . Earlier this week, towns across the state received a letter from the office of Secretary Ben Barnes, of the Office of Policy and Management, seeking a great deal of financial information. Barnes was asked in a letter from Governor Dan Malloy to gather information and analysis regarding, “municipal aid, local tax levels, expenditure trends, fund balances, and any other criteria that could better inform our decisions.”

The wording of Malloy’s letter to Barnes deals primarily with municipal aid, saying that “how we fund our single largest expenditure must be on the table.”

Read Malloy’s letter to Barnes here

“In recent years, I have made it a priority to protect aid to municipalities. In contrast, we have made drastic changes to how we fund other areas of state government — both in total funding and in our rationale for how limited dollars are allocated. We’ve reduced state services; we’ve cut funding to private providers; we’ve asked state employees to come to the table with concessions; and we’ve raised revenues. Throughout all of this, we’ve held town aid harmless. In fact, it could be said that we have sacrificed state services and raised revenues in order to shield town government from facing difficult choices required of state leaders and implementing reforms,” Malloy’s letter reads.

The purpose of the information gathering is not explicitly stated, but later the letter does make it clear that Malloy is looking closely at aid to cities and towns and the way it is distributed.

Malloy goes on, “If we fail to recalibrate aid based on shifting local demographics, economies, and need, we risk perpetuating an inequitable distribution of burden among our communities. We risk not investing in the communities that should be our assets in attracting economic development, young professionals, and families.”

Simply, it appears Malloy has asked Barnes to gather information on the financial standing of towns across the state to assess how much aid to send, or not send. The information requested is meant to include historical data and current conditions, and is meant to be made public as well.
What the Milford officials say
While the letter certainly has an ominous tone, in Milford, city leaders said they aren’t getting too upset yet. Mayor Ben Blake said the state asks for this kind of financial information every year. City Finance Director Peter Erodici agreed, saying, “The state asks for this information annually, so it is not unsettling.”

Still, the underlying message isn’t lost on the mayor, who said, as he has said several times over the past few months, it would be unfair for municipalities like Milford to be punished for being fiscally prudent.

“I hope that Milford is held harmless,” Blake said this week. “We should not be punished for prudent financing.”

When the Board of Finance was starting to work on the city budget in March, Governor Malloy’s state budget plan called for an $11.1 million funding cut to Milford, which officials here said would be devastating.

The biggest portion of that was a proposed $10.8 million cut to the city’s Educational Cost Sharing (ECS) grant, which would have left Milford receiving zero ECS dollars.

The aldermen, in adopting a new city budget in May, took a more favorable approach to what might eventually be approved at the state level, and projected $8.3 million in revenue from ECS funds.

And despite the letter that the governor sent to Barnes, Blake remains hopeful.

He said there have been four caucus budgets proposed since the governor’s and none of those had drastic cuts in aid to Milford.

And as the city continues to wait anxiously for a state budget, the mayor said he is lobbying the city’s state representatives and making contingency plans. The aldermen, for example, shaved about $2.1 million off its spending plan before adopting the 2017-18 budget, in anticipation of reductions in state revenue.

Republican State Rep. Charles Ferraro said the only way to save municipalities like Milford from drastic cuts is for the state to pass a budget.

“The failure of Democrat leaders to pass a budget by the end of the fiscal year has led to the governor having unilateral control over the state’s finances,” Ferraro said. “The governor is preparing to make deep cuts to municipalities, and the only way to prevent these reckless cuts is for Democrat leaders to let lawmakers vote on a budget.”

His fellow Republican State Rep. Pam Staneski also blamed the Democrats for the budget debacle.

“In the absence of us doing our job the governor gets to run the state through executive order,” Staneski said. “With that said, the governor has wanted to ‘redistribute’ dollars from fiscally sound municipalities like Milford and Orange from the beginning, he has made that very clear.”

State Rep. Kim Rose, a Democrat, said her party’s hope is to avoid deep cuts to municipalities.

“The House Democrats budget proposal includes diversifying the way towns raise revenues, so they are less reliant on state aid and property taxes,” Rose said. “We also continue to encourage the regionalization of services to achieve economies of scale.

“That said, if our budget is going to become law, and we are going to avoid major cuts to towns, we will need the support of the Senate and, ultimately, the governor.”