Amid budget crisis, House passes plan to let towns adjust tax bills
The House of Representatives unanimously approved a bill Saturday to help cities and towns adjust their property tax bills as the state’s budget crisis plays out in the coming weeks or months.
The measure, which now heads to the Senate, would allow communities to more easily revise tax bills to reflect changes in state aid ordered later this year.
The product of a compromise between House Speaker Joe Aresimowicz, D-Berlin, and House Minority Leader Themis Klarides, R-Derby, the bill comes three months after another measure to offer communities budget flexibility bogged down in the Senate amid a partisan dispute.
The two leaders say they and their colleagues have been pressed constantly by municipal leaders for more guidance about how much aid their communities can expect from the state over the next two fiscal years.
“We’ve been hearing about it since session started,” Klarides said. “I’ve had mayors and first selectmen in my office I don’t even know because they’re so concerned about it. They want advice. They want guidance. I always tell them I would err on the side of caution, but they need flexibility.”
Aresimowicz said he served on the Berlin Town Council’s budget committee before his tenure as a legislator and understands the local concerns firsthand. “It’s tough, everything you do is projections until the state adopts the budget.”
Even in good fiscal times, the speaker added, some communities budget adoption schedules require action weeks before the General Assembly approves a state fiscal plan. “This will allow them the flexibility so they are not overtaxing or undertaxing,” he said.
The measure would guarantee municipalities the option to revise their budgets, after adoption, to reflect any difference between the grant levels anticipated in those plans and the exact amounts included in the state budget — even if prohibited by local charter.
Currently, property tax obligations may be split only into two, equal installments, due in July and in January. This bill also would allow local officials to increase or decrease the January installment to compensate for any variance in state assistance.
Connecticut Conference of Municipalities spokesman Kevin Maloney said, “CCM and its member towns had been seeking this type of legislation, and it does provide them flexibility to adjust their budgets in what has been an unusual budget year, for the state and for cities and towns.”
“I think it’s going to be very helpful given the volatility everyone is concerned about,” said Betsy Gara, executive director of the Connecticut Council of Small Towns.
That volatility stems from a host of competing proposals to close huge projected deficits in the next state budget.
Analysts say finances, unless adjusted, will run $2.3 billion in deficit in 2017-18, and $2.8 billion in 2018-19, potential shortfalls of 12 and 14 percent, respectively.
Separate budget proposals from Gov. Dannel P. Malloy, Democratic legislators and Republicans all include significant cuts in local aid.
The governor also has two other controversial proposals: one that would boost municipal coffers and another that would tap them.
Malloy has recommended allowing communities to tax nonprofit hospitals’ real property, which the administration estimates would yield an annual total of $212 million for cities and towns.
But he also has recommended billing municipalities for a portion of skyrocketing contributions to the teachers’ pension fund, specifically $400 million per year.
Both of the governor’s proposals have drawn bipartisan opposition from legislators, but remain part of state budget deliberations because of the huge projected deficits.
Malloy spokeswoman Meg Green said the administration is reviewing the bill passed Saturday in the House.
The governor asked lawmakers back in early March to adopt a proposal to give communities more time to adopt their local budgets. But it died in the Senate, where Democrats and Republicans each hold 18 seats.
Democrats accused Republicans of waging a filibuster. The GOP fired back that members had concerns because the bill was poorly drafted, allowing local leaders to extend the budget adoption process without first holding a public hearing.
Adam Joseph, spokesman for Senate President Pro Tem Martin M. Looney, D-New Haven, said Looney generally is supportive of the concept adopted Saturday in the House, but must review the bill.
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