Helping towns with increased fees and taxes, but no major mandate relief

It wasn’t the fiscal lifeline that town leaders were hoping for, but they said they will happily take the small amount of money an increase in the hotel tax and town fees will generate.

The Finance, Revenue and Bonding Committee on Monday passed two bills — one increasing the hotel tax from 12 to 15 percent and another increasing fees for various town services such as notarizing documents and issuing dog or marriage licenses–that could generate an estimated $20 million in new revenue for towns.

“Look, we appreciate it because it does bring in some money,” said Bart Russell, executive director of the Connecticut Conference of Small Towns (COST). “But we hope they do see the light of day on the more expensive mandates. The more meaningful [bills] were taken off the table.”

Town aid for education, transportation projects and other programs has remained constant at about $2.7 billion annually since fiscal 2008, and Russell and the Connecticut Conference of Municipalities (CCM) said they are bracing themselves for cuts this coming year as the state faces major deficits.

“We are scratching around for whatever resources might be available. But we’re getting to a point that this level of state aid will result in some really really sad situations,” Russell said.

So, CCM and COST say if legislators really want to help towns, they should act on three separate proposals that have been killed year after year.

The first bill would require both the House and the Senate to muster two-thirds majorities to approve any new unfunded mandate on towns.

“They should send the funds necessary to implement those mandates. Every dollar in mandate relief is as good as an increase in dollar aid,” said James Finley, Jr., executive director of CCM.

The two other priority bills for CCM and COST would be to repeal the prevailing wage requirement for municipal projects and modify the binding arbitration rules for contract negotiations with local unions.

All three proposals failed again this year. Instead, smaller-scale mandate relief and revenue bills were favorably voted out of both the finance committee and the Planning and Development committees.

Rep. J. Brendan Sharkey, D-Hamden, co-chairman of the P&D committee, said relieving the smaller-cost mandates coupled with a new tax revenue stream for towns are important first steps.

“Of course the biggest unfunded mandate is us telling towns their only revenue source is property taxes. But all these little things will add up,” he said.

Sharkey’s committee did pass several bills relieving costs for towns, including extending the time a town has to post meeting minutes online. Another would delay implementing limitations on out-of-school suspensions, which CCM says could cost some large districts $4.5 million a year by requiring establishment of in-school programs for problem students.

“These are not insignificant costs. But I understand we have to do more,” said Sharkey, acknowledging that his M.O.R.E. Commission is looking at long-term solutions for the towns top priority bills for the 2011 legislative session.

If town leaders thought their gains Monday were modest, Republican legislators thought the tax and fee increases were too much.

“It just seems we are getting [residents] at every turn. You know, at some point it has to stop,” said Deputy House Minority Leader Themis Klarides, R-Derby.

“Our tourism industry is already being gutted and they want to tax it some more. I don’t think it makes sense to tie town aid to a volatile revenue source,” said Rep. Vincent J. Candelora, R-North Branford, ranking Republican on the finance committee. “We are just too quick to raise fees and taxes and not make spending cuts. They need to begin to put cuts on the table.”