Wilton takes wait and see attitude to Gov. Malloy’s budget ideas

First Selectman Lynne Vanderslice is taking a wait and see attitude before commenting on Gov. Dannel P. Malloy’s recently announced budget ideas regarding education and funding for the towns.

The ideas include shifting some of the cost of municipal teachers’ pensions from the state to the towns, reducing mandates, recalibrating the Education Cost Sharing (ECS) grant, and creating a municipal accountability system designed to provide state intervention and support to local governments confronting fiscal challenges.

Details of the ideas were expected to emerge this week.

"It is premature to comment until the details of the proposal are released. All of us in Wilton would encourage the Governor to eliminate state mandates,” Vanderslice said in an email.

In fact, the governor has proposed eliminating some mandates. They include:

  • Eliminate municipal spending cap for most municipalities.

  • Provide for the random selection of neutral arbitrators and the use of a single neutral through an agreement of the parties in the binding arbitration process.

  • Allow towns to negotiate employee contributions under the Municipal Employees Retirement System.

  • Exclude 2017 state aid increases from collective bargaining ability to pay consideration.

  • Increase the prevailing wage threshold for the first time since 1991 to $1 million for new construction and $500,000 for remodeling.

In a press release issued Feb. 3, the governor proposed changes in how the state funds teachers’ pensions. Among the changes, he is proposing that municipalities share in the responsibility for funding the retirement system by covering one-third of the employer share of the actuarial cost of the pension system. This proposal does not change or reduce teachers’ pensions, the release said.

The governor is also proposing an updated ECS grant formula — the state’s main public education grant awarded to every municipality — that will count current enrollment, recognizing shifting demographics of small towns and growing cities. It will also measure poverty by replacing the free and reduced-price lunch measure with HUSKY A data.

In addition, the governor is proposing to adjust how the state funds special education by decoupling it from the ECS formula. Under the proposal, a new Special Education Grant will be created and funds allocated on an adjusting scale based on a municipality’s relative wealth. Local districts will be required to seek Medicaid reimbursement for eligible special education services. They will continue to share the additional federal revenue with the state. Malloy is also proposing to allocate an additional $10 million towards special education.

Finally, Malloy is proposing to provide towns and cities with additional relief and flexibility by modifying the state’s Minimum Budget Requirement (MBR) — the state law requiring municipalities to allocate at least the same town education aid as they did in the previous fiscal year.

For any district that may see a decrease in its ECS grant, this MBR can be reduced by a sum equal to the difference of its fiscal year 2018 ECS grant minus its adjusted fiscal year 2017 ECS grant.

Starting in fiscal year 2019, the governor is proposing to eliminate the MBR for all school districts that do not participate in the state’s Alliance District program and require the state Department of Education to develop recommendations for an alternate method of ensuring adequate local funding of education.
Municipal accountability
Also, Malloy  announced Feb. 2 the state budget proposal he will release this week will include a plan for creating a municipal accountability system.

To achieve this, the governor is proposing a tiered system of accountability under which municipalities would be subject to increasing levels of review and intervention based on their fiscal condition and the amount of state aid they receive. The proposed legislation will create a Municipal Accountability Review Board (MARB) that will be empowered to review municipal finances and place towns and cities into an accountability framework based on factors such as bond rating, fund balance, and state aid as a percent of budget.

Gov. Malloy is expected to present his full state budget proposal on Feb. 8 during an address to a joint convention of the Connecticut General Assembly.