Fasano asks AG for opinion on Malloy’s shift in town aid

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Senate Republican leader Len Fasano

Senate Republican leader Len Fasano is questioning the legality of Gov. Dannel P. Malloy’s executive order dramatically realigning municipal aid in the absence of a new state budget.

Fasano appealed to Attorney General George Jepsen for a legal opinion on the order Malloy released Friday.

“While the state is unfortunately living without a budget for the fiscal year 2018 to fiscal year 2019 biennium and the governor is exercising his executive authority to continue the operations of the state of Connecticut, he is not above the Connecticut General Statues and must operate within existing statutory constraints,” Fasano wrote to Jepsen on Friday.

The governor would reduce grants to school districts in the aggregate by 28 percent in October — if no state budget has been adopted.

He would eliminate Education Cost Sharing funding entirely for 85 school districts and reduce funding between 40 and 90 percent for another 54 districts. Grants to the 30 lowest-performing school systems, also known as Alliance Districts, would remain unchanged.

The governor also is capping special education grants to school districts, even though they would receive more under a formula set by law. Such grants have been capped for more than a decade, but the capping legislation has expired. An extension of the capping system is expected to be included in the new budget when it is eventually adopted.

The governor also is reducing property tax relief grants for cities and towns, including funds used to reimburse communities for revenue they stand to lose because of a state-imposed cap on local property tax rates on motor vehicles.

The cap, which stood at 37 mills last year, falls by statute to 32 mills this year. But Malloy used his executive order to maintain the cap at 37 mills.

In his letter to Jepsen, Fason wrote: “It is my contention that the governor’s revised Executive Order Allocation Plan of August 18, 2017, is in violation of clear statutory mandates and the only way the governor can adjust these three statutory mandates is with legislative approval.”

“We have received Senator Fasano’s opinion request and will carefully consider the issues presented,” Jaclyn Severance, spokeswoman for the attorney general, said Monday. “As is our practice on opinion requests involving state budgetary issues, we will seek input from all appropriate parties before coming to any conclusions. We would decline further comment at this time.”

“We’ve made it very clear that allocating state funding by executive order is not ideal or preferable,” Malloy spokeswoman Kelly Donnelly said. “However, the governor has an obligation to faithfully execute the law in the absence of a legislatively adopted budget, and that is precisely what he is doing. The executive order will continue to be adjusted in the future to address statutory requirements for the current fiscal year ending June 30, 2018. The bottom line is that the state needs a budget now, and that requires action by legislative leaders, including Senator Fasano.”

Malloy is grappling with state finances that, unless adjusted, will run heavily in deficit.

Analysts said Connecticut’s finances would run $2.3 billion, or 12 percent, in the red without adjustments this fiscal year. Surging retirement benefit, debt costs and other contractual obligations, coupled with shrinking income tax receipts, are the major factors behind that potential shortfall.

A new concessions plan ratified this summer by state employee unions and by the General Assembly is expected to scale that deficit down to about $1.6 billion.

But that still leaves a potential shortfall equal to 8 percent of the General Fund — and six times the size of the state’s modest budget reserve.

The governor says he is trying to avert a fiscal catastrophe, preserve essential services, cover escalating debt payments and distribute some aid to municipalities — all without the tax and fee increases that could be included in a new budget.

Municipal aid, community-based social services and Medicaid-funded programs are the two largest areas of spending outside of these areas. But Medicaid programs are bound by federal entitlement rules and cannot be reduced significantly without federal approval. That puts significant pressure, absent a budget on programs for municipalities, on the disabled and other needy residents.

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