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Listen Up: Towns Have Huge Stake

Concerns Should Help State Leaders Frame Solutions

BART RUSSELL

January 17, 2010

From Connecticut's small rural towns to its big cities and in all the suburban communities in between, Main Street is hurting. The economic distress that has marked the past year will probably get much worse before the state and its 169 municipalities begin to recover from the economic challenges they face. In the year ahead — and perhaps beyond — towns will no doubt be asked to do more with less by citizens caught in the throes of financial uncertainty.

No one can predict for certain how many more state residents will lose their jobs, or how many more Connecticut homes will be foreclosed upon. One thing, however, is certain. Revenues to pay for essential local and state government services have declined and will continue to drop — perhaps precipitously. Fiscal forecasters agree the state will face another large budget deficit during the next fiscal year.

In response to the economic downturn, Connecticut leaders in many municipalities have frozen their budgets and initiated layoffs. Going forward, state aid to help fill the growing local revenue gap will certainly not increase and may well be cut. Federal bailout assistance to the state and its towns is scheduled to end next year.

Government leaders must take a bold and creative approach to budget and policy-making. A business-as-usual response will not get us out of this predicament.

While there is obviously no magic bullet that will end the recession, the state — working face-to-face in partnership with local government leaders — can take a number of important steps to help ameliorate the effect of the recession on the delivery of essential public services.

In a departure from the rancor and divisive interaction that has marked intergovernmental relations in Connecticut in recent years, we encourage the governor and legislative leaders to invite local government representatives to join them in a new spirit of cooperation to establish decision-making principles for managing fiscal change.

Here are a few such principles to consider:

•Reductions in state aid — if needed — should be as fair as possible. No single municipal aid program should be targeted for disproportionately large cuts.

•Unfunded, costly state mandates on towns should be revised, suspended or eliminated. Under our current economic circumstances, the cost of foisting this expense on towns can no longer be ignored.

•New revenue-generating options should be considered. Local property taxes — already near the highest of any state in the nation — cannot be increased or relied upon to fill the gap in funding that towns face. State and local officials must decide together how to generate increased revenues to support basic governmental services.

•New, more effective models of governance and service delivery should be considered and — where proven — implemented. During the past decade, many towns joined to undertake cooperative service delivery systems. These voluntary compacts have worked well and should be encouraged.

These few ideas are offered as possible discussion topics. More important than settling on a specific meeting agenda is our belief that state and local government leaders must come together now for serious discussions and action.

Connecticut is broken fiscally and the state government is broken systemically, due to the ongoing failure of legislative leaders and the governor to work cooperatively with one another — and with town leaders. The recession is an opportunity to re-think how government works at all levels.

Towns can be incubators for success, if given latitude and respect. The state needs to get past the old notion of "our house, our rules" and invite towns to be real partners in governance and service delivery. Working together is much more effective than continuing a dysfunctional system.