Report: Mandates Just Keep On Coming

First ACIR report in years shows burden of state mandates on municipalities

In February, the Advisory Commission on Intergovernmental Relations (ACIR) released the first compendium report on mandates impacting municipalities in six years. Their report showed over 1,400 mandates on towns and cities, many of which are more costly than originally thought. Before the suspension of the legislative session, CCM was prepared to highlight the work done by ACIR and show that our many calls for mandate reform are not unwarranted.

The purpose of this compendium is “to categorize the mandates as to type, provide a brief history of the mandates along with its enactment date, and analyze the cost incurred by local governments in implementing the mandates,” according to ACIR.

Mandates in the compendium, of course, range from fairly banal reporting mechanisms to decreeing that municipalities provide public education. Over the 1,400 mandates that are recognized and reported by the ACIR, not every single one is costly in and of itself. But as ACIR admits, they have a cumulative impact that is hard to understate.

Two mandates, 12-19a and 12- 20a, have projected a noticeable cost onto municipalities since they were enacted. These two statutes exempt state-owned real property, private colleges and hospitals from municipal property taxes. Both have had real impact on the grand lists of towns and especially larger cities where upwards of half of the property rolls cannot be taxed.

In this area, the state is set to reimburse municipalities for revenue lost, known as the Payments-In-Lieu-ofTaxes (PILOT). For private colleges and hospitals, the reimbursement rate is set at 77%, and for state-owned property, the rate is 45%. But the state has not funded at these levels in years. Actual funding comes in at 22% and 14%, respectively.

According to our estimates, this means the state is underfunding this mandate by about $400 million. This loss of revenue puts an extraordinary amount of pressure on local property taxes as way to fund municipal operations.

There are many of the same issues in the way the Special Education Excess Cost Grant operates. This grant reimburses school districts for the reasonable costs of special education for a student who lives in the district that exceed 4.5 times the district’s average per pupil expenditures for the preceding year and 100% of the cost of special education for any student placed in the district by a state agency and who has no identifiable home district in the state.

In FY 03, this grant was capped by the State Department of Education and has been maintained through FY 20, with the exception of FY 09. These prorated allocations have not kept up with the significant rise in special education costs. Our estimates say that towns will lose nearly $130 million in funding if the Excess Cost Grant is flat funded at FY 19 levels.

This is not to say that every mandate is a problem of underfunding. For recycling, which became mandated in the late 80s, the statute was a revenue generator until the China National Sword policy which cut off the market for recycled materials.

Bridgeport saw their recycling shift from $129,512 in profits to $394,380 in expenses, Fairfield from $50,000 in profits to $525,561 in expenses, Waterbury shifting from $15,022 in revenues to $330,000 in expenses. Stamford has perhaps the most dramatic change – going from $95,000 in revenues to $700,000 in expenses. The Chinese policy will not go away, and so municipal officials believe that this recycling crisis will not be resolved quickly.

While it would not be prudent to get rid of recycling, there are ways that the state can help municipalities adjust and bring down costs. Connecticut should respond to this situation by modernizing the bottle bill program and continue efforts to develop domestic recycling facilities for all recycling needs. Because of the previous Chinese market for recyclables, there is no local marketplace for recycled content. Our state needs to think of ways to reinvigorate the marketplace locally, which will have the added benefit of a greener future.

More locally, the mandate on Municipal Separate Storm Sewer Systems, better known as MS4, is a product of the Environmental Protection Agency as part of its Stormwater Phase II rules, per the Connecticut Department of Energy and Environmental Protection website. But it too contains requirements that have increased costs for municipalities.

The Illicit Discharge Detection and Elimination (IDDE) program contained significantly more detailed requirements regarding the legal authority required to implement, protocols for performing the field work to detect and eliminated illicit discharges, mapping requirements and more. With more mandates being added than repealed, the total number of mandates is sure to be larger when the next report comes out in 2024

Adjacent to costs associated with the MS4 permits are the pesticide bans that have forced municipalities to deal with rapidly deteriorating fields on their school grounds and large expenses in attempts to rehabilitate them.

While created in the best interest, this mandate has produced results that are not in concordance to the original aims. The presence of grubs in the fields have attracted rodents, which burrow through the soil creating dangerous tunnels that cave in as players run across them. They have also left fields susceptible to crabgrass, which hardens the soil, increasing the chance of injury if a player should fall.

Most municipalities do not have the funds to create artificial turf fields, which present issues of their own, or the resources to implement costly organic only maintenance programs.

These represent just some of the areas that need to be fully funded by the state or else a dramatic overhaul in the way that business is done. But that’s not to say that there has been no headway. The mandate reform that has begun taking place over the last seven years, spearheaded by CCM, should be considered a good start. More work needs to be done.

But ACIR cautions that this should not be considered a “hit list.” They write “from a legal and a practical standpoint, some degree of state direction is appropriate because local governments have an interest in administering many functions for which statewide uniformity is desired.”

While this may be true for many of the mandates that are put on towns and cities, it does not mean that the state has given their full support to helping where they can. Mandates concerning PILOT, ECS, MS4, MBR, put much more of the onus on municipalities than originally estimated.

The already short 2020 legislative session was cut even shorter by the COVID-19, with legislators conducting business for only four weeks before social distancing forced them to stop meeting.

Perhaps for the first time ever, this unique situation has led there to be no new mandates in 2020.. With more new mandates being added than reduced or repealed, the total number of mandates is sure to be larger when the next report comes out in 2024.

CCM will continue to work on mandates relief throughout the year, looking at the ACIR report and identifying areas of concern for our municipalities.