Municipalities group director: state should act outside 'comfort zone' to create economic stability

New London — The Connecticut Conference of Municipalities' director said on Tuesday that the state should act outside of its "comfort zone" and follow practices that have provided long-term economic stability beyond the "land of steady habits."

Also on Tuesday, the governor announced that he will include a "mandate relief package" for cities and towns in his budget proposal next week.

Joe DeLong, the executive director of CCM, spoke to The Day's editorial board and Mayor Michael Passero about CCM's report, released last week, that advocates for changes "to ensure that local governments can meet the future needs of the state." A panel of 21 municipal leaders across the state, along with policy experts from outside of Connecticut, worked on the 90-page report.

DeLong said the recommendations are based on research and data on what has worked in other states — strategies that Connecticut could adopt to become competitive and predictable in the long term, rather than trying to just get through this year's budget.

The report offers recommendations for revenue diversification for local municipalities, service sharing and cost savings.

Revenue diversification

DeLong pointed out during the discussion that Connecticut is one of only seven states in which municipalities can't charge fees for the use of public rights of way, such as when a cell tower company installs infrastructure. He said local governments should be allowed to charge the fees to raise revenue.

The report further recommends decreasing the sales tax rate to 6 percent, or lower, and then adding a 1 percent local sales tax. DeLong said that as long as Connecticut's sales tax is 7 percent or lower, the state will maintain its "competitive edge."

"The concept is to maintain a competitive sales tax, while trying to bring property tax to a more competitive level," he said.

About half of the new revenue stream would be used to fully fund the PILOT (payment in lieu of taxes) program and provide a "big boost" to cities that are struggling because their property has been taken off the tax rolls and the state is not fully funding it, he said. The second half would be distributed to cities and towns across the state.

The report further recommends broadening the sales tax base by lifting some exemptions.

Service sharing and cost savings

DeLong said the report focuses on how to clear obstacles that prevent towns from sharing services.

Passero supported the need to analyze the obstacles standing in the way of municipalities that want to consolidate services, such as emergency dispatch, which New London has been working on.

"We know the technology is there. We could probably have two or three dispatch centers for the entire state, but why hasn't it happened?" he asked.

DeLong pointed out that regional dispatch centers could be better staffed than some small rural towns with their own dispatch centers.

"Each one of the services that we could combine, we have to look at why it's almost impossible to do it," Passero said.

The report offers specific recommendations, such as changing state law so a town's charter can't preclude municipalities' ability to share services and having either a coalition of bargaining units or one new bargaining unit to represent all the employees.

The report also recommends "synergies" between local governments and school boards, not just among towns. 

CCM further outlines recommendations to save costs, including reducing unfunded mandates for municipalities, establishing a labor relations task force, and creating another plan within the Municipal Employee Retirement System for new hires.

Gov. Dannel P. Malloy announced Tuesday that he will include a "mandate relief package" for cities and towns in his budget proposal next week. He is calling for the elimination of the municipal spending cap for most municipalities, flexibility for schools' curriculum and professional development, and a higher prevailing wage threshold, among other measures listed in a news release.

DeLong said what really encouraged him about the announcement is that they are having this conversation and having it in January.

In particular, the governor's proposal to allow "towns to negotiate employees' contributions under the Municipal Employees Retirement System," DeLong said would spark the important conversation of how to create sustainable pensions at the municipal level.

The Connecticut Council of Small Towns issued a news release praising the governor's proposal.

"In particular, COST strongly supports efforts to increase prevailing wage thresholds, address inequities in the Municipal Employees Retirement System, eliminate the municipal spending cap, address education mandates, and defer the mandatory set aside program," Betsy Gara, COST's executive director, said in part of her written remarks.

"I think everything has to be on the table, in particular if we are going to decrease funding for towns," state Sen. Cathy Osten, D-Sprague, the co-chairman of the Appropriations Committee, said in response to the governor's announcement.

Of all the proposals, she said, she thinks allowing small towns the option to eliminate school superintendents would result in the most cost savings.

She has proposed legislation that would allow the legislative bodies of small towns — with fewer than 10,000 residents, no more than two schools, and fewer than 2,000 students — to eliminate superintendents.

State Sen. Paul Formica, R-East Lyme, co-chairman of the Appropriations Committee, said it was good news the governor was willing to consider and propose eliminating some of the mandates from which cities and towns have been asking for relief. But he said it raises the question of whether this is an indication that the governor is planning to propose more radical changes to state aid for cities and towns.


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