Governor Dannel Malloy released his executive order allocating state funds to towns and cities on Friday, zeroing out education funds for 85 towns across Connecticut.

The order also eliminated payment-in-lieu-of-taxes for hospitals, colleges and state owned property, and casino revenue grants.

The executive order will go into effect if a state budget is not approved by October.

The governor previously said that state aid would be limited to municipalities with the greatest need, so the cuts fell hardest on towns that have maintained fiscally sound budgets.

Due to the lack of a state budget, Connecticut can only operate within the previous budget’s spending allocations. State costs went up for the new fiscal year, however, leaving limited resources for the governor to distribute through executive order.

“This has never been my preferred path,” Malloy said in a press release. “I have proposed full balanced budgets and also short-term solutions that would alleviate some of this pain. It is incumbent upon state leaders to come together and reach an agreement on a biennial budget right away.”

Joe DeLong, executive director of the Connecticut Conference of Municipalities, blamed the cuts on the budget impasse.

“The deep cuts in state aid called for today by the Governor would have a severe impact on towns,” DeLong said. “Local governments would not be in this position if the General Assembly had done their job earlier and put forth a state budget that protected the interests of cities and towns and their property taxpayers.”

The governor focused state education funds on towns and cities with “the greatest student need,” and “the most challenged school districts.” This included the 30 lowest-performing school districts known as the Alliance Districts, which are defined in state statute and singled out for increased financial support.

Under the executive order, Hartford, for instance, will maintain the $200.5 million in education funds they received in 2017, but will lose out on $56.2 million in PILOT payments, municipal revenue sharing grants and casino funds.

Other distressed cities like Waterbury and New Haven also face cuts to PILOT payments and other grants, but saw their education funding remain unchanged from 2017.

The vast majority of towns, however, saw all state aid reduced or dropped to zero, including education funds. Wealthier towns like Avon, Simsbury and Darien lost all funding. But the cuts will have big affects on a number of smaller towns that are not particularly wealthy.

Darien, with a population of 20,000 and whose residents have an estimated median household income of $200,000, would see a reduction in state education funds of $406,000.

Harwinton, on the other hand, with a population of 5,500 and an estimated median household income of $81,000 would see a reduction in state education funds of $2.7 million, unless the legislature can come to a budget agreement by October.

After meeting with state lawmakers earlier this month, Harwinton’s first selectman, Michael R. Criss, told his board of finance not to expect a state budget until the fall.

House Speaker Joe Aresimowicz, D-Berlin, recently announced that the legislature would hold a special session on the budget during the week of September 11. Democratic leaders have already announced they plan to raise the state sales tax to help bridge the remaining $3.5 billion deficit.

The budget delay has forced some towns like Torrington to delay the start of school. Torrington faces a $20 million cut in education funding under the executive order.

“The municipal aid that is funded as part of this executive order reflects the nearly impossible decisions Connecticut must make in the absence of a budget,” Malloy said. “It will force some of our municipalities – both large and small – to make similarly difficult choices of their own.”

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