Building A Budget

Municipalities need certainty and stability in inflationary times

With inflation at a nearly four-decade high, budgeting in 2023 is not going to be easy for anyone. From small families hit with the cost of eggs and fuel to municipalities looking at skyrocketing costs for goods that will move projects forward, it will be a difficult proposition to navigate. It is with this framing in mind that we look at the Governor’s proposed budget. Over the coming weeks and months, we look forward to working with the Governor and legislative leaders in the budget process, hoping to address many ongoing concerns for towns and cities.

We can start with the Governor’s acknowledgement in his budget address that the current education aid is insufficient to meet the needs of Connecticut’s students. Additional funding in the Education Cost Sharing grant is needed to bring school budgets to a place where towns and cities can continue to provide a world-class education. The proposed $135 million in additional funding is a start, we can and should do more for our students.

And we should also consider the Excess Cost Grant. Very few states have no dedicated special education funding, and Connecticut because of its cap on this grant only serves around 70% of eligible funds. Without stable funding of our education system, towns and cities cannot budget with any certainty.

The ability to budget with certainty will be afforded to the state government thanks to an agreement between the Governor and the legislative leaders to extend the current budget guardrails. Installed during a time when Connecticut’s fiscal situation was not as positive as it is today, the bond cap, volatility cap, and increase to the state’s rainy-day fund have allowed our state the tools to get to where we are today. With a full rainyday fund, any expected or unexpected financial crisis should not affect municipal aid or taxes.

Thanks to our financial situation, it’s a shame that this budget does not do more to address the regressive nature of the property tax and provide municipalities with additional financial support or mandate relief. Faced with rising costs of doing everyday business, municipalities are stuck between a rock and a hard place in their budgets. True every year, but more so in a inflation-heavy economy, municipalities cannot afford to be burdened with costs associated with new unfunded mandates. Simply maintaining aid will not offset the impact of increased costs.

We look forward to working with the Governor and legislative leaders this year as with every year. With the rising costs of everything, we need to make priorities on education and the rising costs of housing that is driven by the regressive property tax in order to secure a fruitful economic future for our state. It will be a signal to residents and folks considering Connecticut that we’re serious about healthy budgets whether they’re created in the Capitol, the Town Hall or around a kitchen table.