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Reduce municipal tax burden

By Paul Choiniere

Publication: The Day

Published February 03. 2013 4:00AM

Last Sunday, after visiting with legislative leaders for both parties in Hartford, I wrote that cuts in municipal aid will almost certainly be at or near the top of the list when it comes to trying to fix projected deficits of about $1 billion in each of the next two fiscal years.

If that be the case (and given the political impracticality of raising taxes yet again and the no-layoff/guaranteed pay-raise clauses in state labor contracts, I don't see the alternative) here are a few steps lawmakers can take to reduce the blow for towns and cities.

Repeal, or at least moderate, the Minimum Budget Requirement (MBR), a law that essentially ensures that each school district gets a budget that's at least as big as the previous year's budget. The theory is that this protects public education from overzealous fiscal hawks seizing a town's Board of Education and slashing spending to the detriment of education quality. The problem is that in some cases the formula blocks local school boards from making reductions that make sense and it can remove incentives to find reasonable savings. The legislature needs to take a serious look at it.

Reform and update the state's prevailing wage law. The law requires contractors on major government projects, state and local, to pay a minimum wage determined by the Department of Labor. Essentially this means union-scale wages and benefits for various trades. I think this is a good law. Without it, contractors would be bringing in low-wage workers from other states to build Connecticut projects. The result would be shoddy workmanship, fewer jobs for Connecticut laborers and diversion of Connecticut tax dollars to people who don't live and aren't invested here.

The problem I have is that the definition of major project has not changed in a couple of decades. The prevailing wage law kicks in for any new project of $400,000 or more and any renovation work of $100,000 or more. That essentially amounts to every project. Those thresholds need to increase to reflect today's construction costs, giving first selectmen, mayors and school superintendents some latitude in trying to do small projects more affordably.

Force the issue on more regional approaches to providing government services. Small school systems should face penalties in lost state aid if they do not from regional partnerships to lower administrative and overhead costs. Consolidate emergency dispatch services; every town doesn't need their own. Require towns to work together in bidding for materials and services, realizing economies of scale. Some municipalities have taken baby steps towards regional cooperation. It's time to run.

Consider this trade, which would particularly help urban districts - the state assumes the full cost of providing special education but in return lowers general education funding. Special education is important and needs to be adequately funded, but paying for it is killing many school systems financially. How to best pay for it needs to be part of an overall discussion about the state's obligation to support local public schools.

Reform the binding arbitration laws under the Teacher Negotiation Act and the Municipal Employee Relations Act. Because they do not have the right to strike, municipal workers and teachers deserve the avenue of arbitration, but the system has long been weighted in favor of the employees. It needs reform given current fiscal realities and the fact benefit and pay for government workers now outstrips pay and benefits found in the private domain.

If the legislature is going to balance the next budget on the backs of towns and cities, it needs to find ways to help local officials do more with less. If not, the governor and lawmakers should feel obligated to find other ways to fix their deficits.

Paul Choiniere is the editorial page editor.

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