Town leaders: Further reform needed for pensions, school funding

Municipal leaders urged a state study panel Tuesday to support further restrictions on public-sector pensions, ending collective bargaining for retirement benefits and aggressively redistributing education aid from communities losing students to those gaining them.

Local leaders also told the Commission on Fiscal Stability and Economic Growth that Connecticut could bolster local economic development by investing more in transportation.

Connecticut Conference of Municipalities Executive Director Joe DeLong noted that most states don’t permit collective bargaining for retirement benefits. “Connecticut is an outlier there, and it has driven costs to an unsustainable level,” he said.

Could Connecticut lower retirement benefits for state and municipal employees, and for public school teachers, through negotiations at the state and local level?

“I don’t know if it’s possible,” Waterbury Mayor Neil O’Leary, CCM’s president, said in response to one commission member’s question. “I think everything would end up in binding arbitration.”

Municipal leaders have been particularly wary of escalating pension and retirement health care costs in the state budget in recent years.

Pressure from those surging costs not only has resulted in cutbacks to various municipal grants, but also sparked a proposal last year from Gov. Dannel P. Malloy to shift responsibility for one-third of the annual teacher’s pension fund contribution onto cities and towns.

This would have forced communities to pay $400 million to the state this fiscal year and — according to one study — more than $2 billion by 2032.

And while legislators ultimately rejected that proposal, representatives both of CCM and the Connecticut Council of Small Towns fear its return in future years.

Coventry Town Manager John Elsesser said non-education spending in most communities is about as lean as current law allows. Any further cost-shift to avert state tax hikes largely translates into local tax increases.

“At some point you have to choose your poison,” he said.

DeLong said many misunderstood CCM’s opposition to the governor’s cost-shift for teacher pension contributions.

Rather than reduce pension benefits, the proposal simply transferred responsibility for part of a “sinking ship” onto cities and towns. Municipalities are prepared to at least discuss a partial cost-shift — provided it is part of a larger reform effort, DeLong said.

For example, cities and towns often cannot consolidate services at a regional level and achieve sufficient cost savings, CCM and COST representatives said, because those changes are subject to collective bargaining.

O’Leary said the state’s chief program for funding local schools, the Education Cost Sharing grant, still does not properly reflect changing demographics.

“Waterbury is the most under-funded district in the state of Connecticut,” he told the commission, estimating the city is shorted an estimated $59 million per year.

One of the chief problems, O’Leary added, is that the ECS system has not increased grants for communities with rising school populations — like Waterbury — or reduced them for suburbs with shrinking enrollment.

“Contrary to CCM’s posturing, the ability to bargain for decent health care and a secure retirement has benefited Connecticut by reducing employee turnover, improving the quality of public services and generating the kind of purchasing power that benefits our local communities,” Council 4 Executive Director Salvatore Luciano said.

“Fiscal instability and growing economic inequality are serious problems facing Connecticut, yet the only solution CCM and others on the commission seem to have is to drive down the wages, benefits and bargaining rights of middle class workers in the public sector,” Luciano added. “This is not systemic reform. It’s trying to fool people into the belief that taking money out of the hands of working people will somehow spur economic growth when, in fact, the opposite will happen.”

The commission must submit its recommendations to legislators by March 1.

The group’s co-chairman, Robert Patricelli and Jim Smith, did not speculate on what the commission would recommend.

But the chairs did hint strongly that another priority cited by local leaders — greater state investment in transportation — would be reflected in the report.

O’Leary said a survey of municipal leaders at the Jan. 12 meeting of the Naugatuck Valley Council of Governments found 19 out of 19 attendees support the restoration of tolls on some Connecticut highways, and 17 out of 19 back a four-cents-per-gallon increase in the gasoline tax.

We feel transportation funding is an enormously important lever to restart economic growth,” Patricelli said. You can’t have one without the other.”

“We’re not surprised by that,” added Smith, whose commission now has held three public hearings. “And we’re hearing that a lot — that people generally understand that the transportation infrastructure is broken and it needs to be fixed. It may even need to be re-invented a little bit.”