From Gaffney, Bennett & Associates
February 11, 2013 – February 15, 2013
We are sending out a belated and abbreviated Capitol Beat this week. Between historic snowstorms, state holidays and the start of budget hearings, it has been quite a ride. Needless, to say, now that lawmakers and the public have had time to dissect the Governor’s proposed budget for 2014-15, things are starting to heat up, if not parboil, at the Capitol.
Municipalities Balk at Calculus Behind Education Funding — A bipartisan group of mayors under the banner of the Connecticut Conference of Municipalities held a news conference this week to express concerns about the construction of Governor Malloy’s budget as it pertains to cities and towns. While grateful for his attention and to education, some chief executives questioned how he wants to do it and groused that nearly the entire boost in funding goes to the low-achieving school districts. In a nutshell, the administration’s proposal basically seeks to reconfigure Payment-in-Lieu-of-Taxes grants that municipalities receive as a reimbursement for lost tax revenue tied to exempt, state-owned property and housing. Bottom line: There are winners and losers, and it is going to take some negotiations to sort out because some of the state’s municipalities are worried about having to raise property taxes and layoff people if the are in the losing category.
Car Tax Elimination Also Hits Some Bumps – While no one would argue that the state’s property tax on motor vehicles is as regressive as they come, eliminating it isn’t as easy as it sounds as the Governor is discovering after putting it on the table. Governor Rell didn’t gain much traction when she pushed for it either, largely because, by one estimate, its elimination would deprive municipalities of $560 million statewide and shift the tax burden to residential and commercial property owners. Another rock to push uphill. The problem is, to paraphrase the Senate chair of Appropriations, Toni Harp, D-New Haven, the state has a revenue and spending cap problem.
Since the last two-year budget was passed, and taxes were raised by $1.5 billion, the state’s revenues have eroded. That’s a problem when you consider that, according to the state Treasurer, “in an average week the state disburses $540 million to pay bills and meet its other obligations.”
Head of the House – Governor Malloy on Valentine’s Day announced that he has nominated a former, six-year Selectwoman from Darien, Evonne M. Klein, to head the new state Department of Housing, an agency authorized by the Legislature last year. In his new biennial budget, the Governor has proposed putting $60 million more toward building and renovating affordable housing units. While some were quick to point out that Klein comes from one of the wealthiest towns in the country, David Fink, policy director of the Partnership for Strong Communities responded that too often affordable housing options are overwhelmingly available only in urban areas and that, in Connecticut, there are “140 municipalities that don’t have much affordable housing to speak of.”
Familiar Faces in New Places – Freshman U.S. Senator Chris Murphy, D-CT, has been given a high-profile subcommittee chairmanship, one previously held by U.S. Senator Jeanne Shaheen, D-N.H. It was announced last week that Murphy would serve as subcommittee chair of the Foreign Relations Committee in charge of European affairs. This is in addition to his assignments on the Health, Education, Labor & Pensions Committee and the Joint Economic Committee. Meantime, CT Congressman Jim Himes, D-4th, snagged a seat on the House Permanent Select Committee on Intelligence, which has authority over the budgets of the CIA among other intelligence agencies.
Finally, highlights in the week ahead
Monday, February 18, 2013: State Holiday. Capitol closed.
Tuesday February 19, 2013—Friday February 22, 2013:The Appropriations Committee continues its hearings on the budget for various state agencies throughout the week, while numerous committee hearings and meetings will be held and compressed because of holidays and snowstorms. Notably, on Tuesday, OPM Budget Secretary Ben Barnes will be making a presentation to the Finance Committee at 1 p.m. in Room 2E of the LOB to discuss the Governor’s proposed Budget/Revenue proposals. You may view the entire legislative calendar for the week by going to our website: www.gbact.com and scrolling to “Happenings at the Capitol” for times and locations.