For cities, towns: Does blocking mandates trump new state aid?

CCM Executive Director Joseph DeLong

Keith M. Phaneuf / CTMirror.org

CCM Executive Director Joe DeLong

Connecticut cities and towns insist they aren’t biting the hand that feeds them. They just don’t like what’s on the menu.

Despite a Senate Democratic plan to pump $700 million in sales tax receipts into communities over the next two years to relieve property taxpayers, municipal leaders took aim Wednesday at another of the caucus’s key initiatives: a mandated expansion of workers’ compensation for police and fire-fighters.

And while municipal leaders argued that the two issues are separate, their emphasis on battling the mandates — coupled with a lukewarm response to the sales tax receipts — sent a clear message to Senate Democratic leadership.

“We believe legislative leadership must take strong steps to create a viable economy,” Connecticut Conference of Municipalities Executive Director Joe DeLong said at a late-morning Capitol news conference, adding that “unsustainable mandates” would certainly force municipal property tax hikes.

CCM also launched a new radio advertisement this week that makes this argument.

It is understandable that lawmakers want to show compassion for public-sector workers diagnosed with cancer or with post-traumatic stress disorder, DeLong said. But if they support the Senate’s workers’ compensation bill, “they support raising property taxes. They support creating an unsustainable benefit. These are things we think they don’t want to campaign upon.”

Senate President Pro Tem Martin M. Looney, D-New Haven, defended the workers’ compensation bill afterward, calling it fair and reasonable policy.

The New Haven lawmaker also took note that municipal leaders, in the final days of the session, were concentrating on fighting against the mandate bill – and not on fighting for property tax relief.

“It does show they are selectively helpful,” Looney said.

At issue is a bill the Senate passed last week that would require coverage for post-traumatic stress suffered by police responding to certain types of fatalities, a change inspired by the school shooting at Sandy Hook; for firefighters, many types of cancer would be presumed to be caused by occupational exposure to chemicals. The measure is now before the House of Representatives.

Both CCM and the Connecticut Council of Small Towns argued that this would dramatically increase local labor costs, though no specific analyses or estimates have been released.

At the same time, Senate Democratic leaders in state budget negotiations with Gov. Dannel P. Malloy’s administration have been advocating a caucus plan approved by the legislature’s Finance, Revenue and Bonding Committee that would significantly boost aid to cities and towns.

Danbury Mayor Mark Boughton

Claude Albert / CTMirror.org

Danbury Mayor Mark Boughton

It specifically would broaden the sales tax — applying it to dozens of new services — while also dedicating revenues from one-half of 1 percentage point to communities.

Those receipts, about $700 million over the 2015-16 and 2016-17 fiscal years combined, would be used in several ways, including: capping municipal taxes on cars in 57 communities with the highest rates; bolstering payments to cities and towns with large amounts of property-tax-exempt land and buildings; and setting up new funding to encourage regionalization of local services.

But the plan also features a new municipal spending cap that would punish communities if they didn’t use at least a portion of these new revenues to mitigate local property taxes.

CCM officials have been wary of endorsing the bill, noting they still haven’t seen full details on how the cap would work. And municipal leaders said Wednesday that an overly restrictive cap, coupled with expensive new mandates, could be too much to bear, even if new sales tax receipts are sent to cities and towns.

“I don’t think there’s anything that makes these (proposed mandates) more palatable,” DeLong said.

“You can’t pass legislation that you can’t pay for,” said Danbury Mayor Mark Boughton.

“Although towns are working hard to control local costs, declining revenues and increased costs associated with providing services is taking its toll,” COST Executive Director Eizabeth Gara wrote in a statement. “Expanding workers’ compensation benefits at this time will further strain local budgets and put more pressure on towns to increase property taxes or make cuts in programs or personnel.”

The state’s chief business lobby, the Connecticut Business and Industry Association, has been the most vocal critic of the proposed sales tax hikes, warning they would “cascade through the economy” and drive up the costs of goods and services statewide.

CBIA representatives joined municipal leaders at Wednesday’s CCM press conference.

Bonnie Stewart, the CBIA’s tax specialist, said afterward that unfunded mandates probably would strain municipal budgets, lead to local tax hikes and further weaken the economy.

“We believe that any type of mandate that’s unfunded is a problem,” she said. “We believe that any type of mandate that’s unfunded is unreasonable…Connecticut is not in a great spot right now.”

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