The State of the Municipalities

January 31, 2008

When the governor delivers her “state of the state” address Wednesday, she’s sure to follow tradition and regale Connecticut’s more naïve citizens with the many ways the bureaucrats under her command make life in the Nutmeg State worth living.

And at least superficially -- a projected budget surplus, over a billion dollars in the “rainy day fund,” strong job growth in recent years -- state government has a few things to boast about.

It’s unfortunate that no official is charged with providing an annual “state of the municipalities” address. Such a message would not be so rosy. At the local level, Connecticut’s public sector continues to face struggles and strife.

Let’s look at 1998 to 2006, a period for which reliable data are available. During those eight years, Connecticut’s population grew by 7.2 percent. In contrast, local-government expenditures soared by an inflation-adjusted 16.3 percent. The spending explosion was not due solely to increased state subsidies. Property-tax revenue, which funds the bulk of municipal expenses in Connecticut, rose in real terms by 22.3 percent.

Personnel, school-related costs, and debt drive this tax-and-spendism. Many local-government officials continue to wail about “cutting to the bone” and the “loss of public services,” but according to the U.S. Census Bureau, between 1998 and 2006, municipal government employment in Connecticut rose by a jaw-dropping 22.3 percent -- almost three times population growth. Operating expenses, per pupil, in Nutmeg State government schools rose from $9,765 to $11,247. Long-term debt rose by a staggering 41.2 percent, as towns and cities mirrored state government’s addiction to borrowing.

Fewer and fewer citizens are acquiescing to this expenditure trend. Dozens of taxpayer groups have sprung up or been revived in towns and even cities. Where voters have a say in local budgets, Big Government is getting smacked down. Between 2005 and 2007, the total number of referenda it took to pass local budgets in Connecticut rose from 137 to 160. Multiple rejections are growing more common. More municipalities and regional school districts are starting their fiscal years, which begin on July 1, without a settled budget. (In 2007, the number was 17, up from 15 the year before.)

Local officials -- no doubt concerned about reelection and their aspirations for higher office as much as taxpayers’ growing burden -- are searching for answers. Happily, the canard that the only cause of runaway property taxes is inadequate state largesse is giving way to a fuller understanding of the problem. Michael Pace, Old Saybrook’s first selectman, recently declared that “taxpayers can only afford so much, and we can’t just shift the burden from one segment of the people to another. Perhaps it’s time to look at the entire model.”

The Connecticut Municipal Consortium for Fiscal Responsibility, founded in late 2004, has taken some small steps toward a more comprehensive approach. It has united local-government officials behind a simple, three-point agenda: relief from the state’s prevailing wage law for government construction projects, reform of binding arbitration for public employees, and no additional mandates from Hartford without adequate revenue. (The group should be more ambitious, and lobby for repeal of forced unionism in Connecticut local government, but by focusing on smaller targets it probably attracts broader support.)

Governor Rell weighed in with her own relief plan last year. Her tax-cap proposal, a weaker version of the Bay State’s “Proposition 2½,” will be debated again this legislative session. Predictably, the Connecticut Conference of Municipalities (CCM), the lobbying muscle for local politicians, has denounced Rell’s cap, calling it “a cure worse than the disease.” More state funding and extension of the “temporary” conveyance-tax hike are, as usual, the organization’s prescriptions.

But not every municipal official is singing from CCM’s choir. Two newly elected mayors in central Connecticut have publicly broken with the group over its knee-jerk opposition to Rell’s cap proposal. “The bottom line is that taxpayers across the state are in desperate need of help when it comes to soaring property taxes,” argued Manchester Mayor Louis A. Spadaccini, in a statement of support for the tax cap he issued with Newington Mayor Jeff Wright.

Growing local-budget defeats, the rise of the Connecticut Municipal Consortium for Fiscal Responsibility, Rell’s tax-cap proposal, and willingness by some local-government leaders to break with their lobbying machine all indicate that agitation for property-tax relief may be reaching critical mass.

For decades, public-employee unions and their agents at the capitol have blocked even modest efforts to restrain the runaway budgets of Connecticut’s municipalities. Their winning streak might be about to end.  

D. Dowd Muska is a writer, commentator and public-policy researcher. He can be reached at muskacolumn@cox.net.

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