After a few anxious months, municipal leaders now have a state budget in their hands, and its impact isn’t as bad as once feared.
The state legislature approved a $41.3 billion two-year plan in late October. The prolonged budget stalemate left municipalities in limbo in regards to how much funding the state would give them.
While the budget stalemate dragged on, the state operated under executive orders issued by Gov. Dan Malloy. The last executive order would have cut all of the Education Cost Sharing grant for Prospect and Beacon Falls, the towns that comprise the Region 16 school district.
For Prospect, this would have meant a loss of about $5 million.
However, Prospect Mayor Robert Chatfield said the town’s ECS grant was only cut about $264,000 in the state budget.
“I don’t mean that’s not a lot but it is certainly better than $5 million,” Chatfield said.
Chatfield said the town also lost some state funding that is taken from the casinos. However, it was a minimal amount of money and the town can easily absorb it, he said.
Beacon Falls First Selectman Christopher Bielik said the town lost about $300,000 overall in state funding, including a cut in ECS. He said the town planned in its budget on losing about $500,000.
“We are about $300,000 to the good for what we actually had to bear. It was much less of an impact than we were expecting,” Bielik said.
Bielik said the town had set aside money in its fund balance to cover a significant loss. Since the loss was less than expected, the town has sufficient funding on hand to cover it, he said.
Chatfield said the town held off beginning some road work it had planned to do during the autumn. Since the town didn’t lose any funds for road work, the projects will be done in the spring, he said.
Although the budget came out months after it was supposed to, Chatfield said it is not going to impact the way he operates the town.
“Years ago I would have said yes, but no. The only impacts were just the fact we held off on some projects and some people were very uneasy,” Chatfield said. “I think overall we did pretty well.”
Naugatuck’s ECS funding was never really in doubt since the borough school district is considered an Alliance District. However, Naugatuck Mayor N. Warren “Pete” Hess said there were a couple other areas in the state budget that will impact the borough.
The largest loss comes from the state raising the cap on car taxes from 37 mills to 39 mills, Hess said.
The borough, which has a mill rate of 48.55 mills, planned its budget around the 37 mill cap, which was the same amount the cap was during the 2016-17 fiscal year. By raising the cap to 39 mills the borough has lost approximately $345,000 in tax revenue, Hess said.
The raise in the cap also affects Beacon Falls. The town sent out set the car tax bills at 32 mills, which is what the state originally proposed for the cap for this fiscal year.
Beacon Falls’ mill rate is 35.9, which means to town will lose about $19,100 in tax revenue.
Bielik said the town would be able to absorb that loss and would not send out additional tax bills.
“Hopefully that will meet with wide approval from the town,” Bielik said.
The state budget also puts the cost of the state’s Renters Rebate Program back onto the municipalities, Hess said. This could mean a loss of up to $180,000 for the borough once all the numbers are figured out, Hess said.
The borough did receive some additional funding in other areas. Overall, Hess said the borough lost about $400,000.
The Joint Boards of Finance and Mayor and Burgesses will meet later this month or in early December to discuss whether to send out supplemental bills to cover the loss of funds. If officials decide not to send out supplemental bills, Hess said the borough has enough surplus funds to cover the loss this year.