Connecticut Towns Grapple With Big Funding Cuts Amid Budget Deadlock

By Joseph De Avila Features Dow Jones Newswires

A wave of education funding cuts hit Connecticut cities and towns on Monday, forcing them to freeze spending and consider tax increases as the state moves into its fourth month without a budget.

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Garry Brumback, town manager of Southington, said he instructed departments to come up with plans to reduce spending by up to 10%. He also froze hiring and capital purchase.

If the state doesn't pass a budget and provide Southington more funding soon, the town will have to implement across-the-board layoffs in areas of public safety, roads and parks, Mr. Brumback said.

In the absence of a state budget, state education funds to Southington would be cut by $20 million, or 14% of the town's annual budget, he said. "Nothing will be unscathed."

After failing with lawmakers to agree to a budget at the start of the fiscal year in July, Gov. Dannel Malloy, a Democrat, signed an executive order to keep state operations running. But the order can only provide funding based on the state's current revenue projections. That required cuts to municipal aid in excess of $900 million, most of which fell on education funding.

The Malloy administration has said the solution to avoid painful spending reductions is to pass a budget as soon as possible.

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Some of the cuts can be reversed, but that will require a fully enacted budget. Reaching agreement on how to close a two-year $3.5 billion deficit has been difficult.

Republicans lawmakers, along with a few Democrats, passed a budget in September that gave more funding to towns but slashed spending for the University of Connecticut. It also required teachers to pay more for their pensions. Mr. Malloy vetoed that plan last week. The House of Representatives will convene a veto override session Tuesday.

Leo Paul, first selectman of the town of Litchfield, said lawmakers should overturn the governor's veto. The governor's executive order would eliminate state education funding this year for Litchfield, which received $1.5 million from the state last year.

Mr. Paul said the cuts to municipal funding could force his town to raise taxes by up to 8%. "That is unacceptable," he said.

The executive order could reduce school funding for West Hartford by $21 million, or about 7% of the town's budget. Town officials said they have reined in spending to offset potential cuts and want to avoid tapping their reserve fund to keep their AAA bond rating intact.

West Hartford Mayor Shari Cantor said she wants state lawmakers to pass a budget that supports schools across Connecticut.

"We understand the state is in a fiscal crisis," Ms. Cantor said. But "we are going to hurt our young people if we don't invest in them."

Mr. Malloy's executive order keeps education funding flat for the municipalities that have the lowest-performing school districts. That means New Haven will get $154.3 million in education funds from the state, which is the same as last year. But the executive order cuts funding for reimbursements of nontaxable property and other payments by $67 million in New Haven.

The city enacted a hiring freeze for nonpublic safety positions and shut down new contracts, said Toni Harp, mayor of New Haven. It also stopped a youth-work program for this fall, she said.

"We are hurting," Ms. Harp said.

Write to Joseph De Avila at joseph.deavila@wsj.com

(END) Dow Jones Newswires

October 02, 2017 18:13 ET (22:13 GMT)