This story has been updated.
It turns out fixing a state budget isn’t easy.
The General Assembly scrambled in its final hours Wednesday to reset, for the second time that day, rules governing when municipalities can use roughly $180 million in new education aid next fiscal year to reduce local property taxes.
For cities and towns that haven’t adopted a budget yet, it’s uncomplicated. They must comply, as they do every year, with the state’s Minimum Budget Requirement. The MBR generally requires communities to budget at least the same amount for education as they did in the prior fiscal year.
Any state funds not needed to meet that burden can be used to reduce demands on local property taxpayers.
For those municipalities that have adopted a budget, it’s trickier.
They also can reopen the budget and cut the tax rate, according to the measure adopted late Wednesday. But they cannot reduce education spending below the level already approved for the next budget cycle or below this year’s level plus the new state education aid.
That means communities that already have adopted a budget that assumes a big jump in state education aid can’t reverse themselves, cancel that spending hike and substitute a tax cut in its place.
The Senate passed it unanimously around 9:45 p.m. and the House did the same roughly 20 minutes later.
The Connecticut Conference of Municipalities pressed lawmakers to make changes, arguing that both the original state budget adopted Saturday and a first revision attempt — approved early Wednesday morning in the Senate and midday in the House — would have forced most or all communities to spend all the extra education aid on schools, despite legislators’ stated goal of enabling tax cuts.
“We now feel the needed funds will deliver their original intent, which is to provide needed support to public education while relieving some of the burden on property taxpayers,” CCM Executive Director Joe DeLong said.
Gov. Ned Lamont, who insisted communities get the option to bolster schools, ease tax burdens or both, is expected to sign the final rules adjustment into law.
“We believe this fix clarifies the original intent of the General Assembly,” said Lamont’s budget spokesman, Chris Collibee.
The governor and lawmakers also awarded cities and towns $100 million in non-education aid in the new state budget, which also can be used to reduce local property tax burdens.
Had the education grant fix not been adopted, said Sen. Derek Slap, D-West Hartford, his town might have been forced to increase education funding to a level it would have struggled to sustain.
“My intent and the intent of the General Assembly and those who supported this [state] budget was to increase education funding and help towns hold the line on property tax increases, and we want to ensure towns are able to do that,” Slap said shortly before Wednesday night’s Senate debate.
“I’m glad that we could come to a fix that could make the policy slightly better, slightly more positive for municipalities and the local taxpayers,” said Sen. Ryan Fazio, R-Greenwich.
House Speaker Matt Ritter wasn’t convinced Wednesday morning that a technical fix was necessary but wasn’t opposed to further clarification.
“I understand there’s a different interpretation by some,” he said, “but we are of the camp that you could always reduce the [local] mill rate.”
