Shift in ECS would hit Beacon Falls, Prospect

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As the state continues to operate without a two-year budget in place, Gov. Dannel Malloy last week unveiled an updated spending plan that would eliminate education funding for Beacon Falls and Prospect but spare Naugatuck of the same fate.

In the absence of a state budget, Malloy has been setting state spending through an executive order since July 1. The latest revisions to the order cut 100 percent of the Education Cost Sharing grants to 85 municipalities now and reduces grants to 54 others in order to shift the funds to the remaining 30 municipalities.

The cost shifts allowed the Malloy administration to maintain last year’s funding levels for the Alliance District program that provides targeted investments in Connecticut’s 30 lowest-performing school districts, including Naugatuck. The shifts in ECS — the largest single state subsidy to local governments — would go into effect in October, when the first payments are due, if a state budge isn’t adopted before then.

Beacon Falls and Prospect, which comprise the Region 16 school district, are among the 85 municipalities that would lose all their ECS funding under Malloy’s plan. Beacon Falls stands to lose $4,067,920 this fiscal year, while Prospect would lose $5,297,609.

“Its real effect is on the towns of Prospect and Beacon Falls,” Region 16 Superintendent of Schools Michael Yamin said. “However, with that being said, we are a cog of both towns. What will the effect be? It will be devastating.”

Prospect Mayor Robert Chatfield said losing the funding would be “catastrophic” for the town, while Beacon Falls First Selectman Christopher Bielik echoed Yamin’s sentiments describing it as “devastating,” if the plan goes forward.

“We certainly can’t sustain an elimination of our ECS funding,” Bielik said.

Chatfield believes Malloy is covering himself in case a state budget isn’t adopted before the first ECS payments are due to towns and cities. He’s hopeful that when a state budget is passed the funding will be in place.

Bielik added that it is important to step back and realize that Malloy is operating under executive order in absence of a budget.

“My hope is that he’s using this plan as a measure to try to break the logjam in the legislature,” Beilik said.

The legislature has yet to agree on a two-year budget that would close what was a projected $5 billion deficit prior to the start of the fiscal year. A special session of the legislature is scheduled for September.

Yamin said he has had discussions with Bielik and Chatfield regarding contingency plans.

Chatfield said a possible Plan B is one he would like to avoid.

“We could go to plan B which would be a mini tax, which people would hate and we don’t want to do,” Chatfield said.

Chatfield added the state should have to meet deadlines when it comes to passing a budget.

“The towns have to meet schedules set forth by the state. So the state should have to set and meet deadlines. That would take care of this,” he said.

Naugatuck’s $30,280,380 in ECS funding remains in place under Malloy’s plan because the borough is one of 30 Alliance Districts. However, the borough isn’t completely spared under the revised executive order, which includes cuts to other municipal grants.

The changes to overall state aid contemplated in the new plan would reduce total municipal grants $243.8 million more than Malloy’s initial order anticipated over 2017-18.

Naugatuck Mayor N. Warren “Pete” Hess said the borough stands to lose about $2.2 million if the order remains in effect.

“It is all going to be changed two or three more times before we have a budget in place anyway,” Hess said. “We are in the Twilight Zone right now.”

Hess said the borough has enough revenue to carry on for now. He added officials are anxiously awaiting the final decision by the legislature on the budget.

“It is impossible to determine where we are going to wind up until we get a final decision from the state legislature,” Hess said.

Luke Marshall and the Republican-American contributed to this article.