Following Capital Rally—

Lyddy Defends State Tax Increases As ‘Inevitable’

By John Voket

Saying he still is not satisfied with the final state budget proposal, Newtown’s State Representative Christopher Lyddy nonetheless told The Bee following a rally in Hartford Wednesday that tax increases will be necessary to balance Connecticut’s fiscal ship.

“Revenue increases [taxes] are inevitable,” Mr Lyddy wrote in an email reaction dispatched to The Bee. “It seems unreasonable and irresponsible that we could address an $8–10 billion deficit with cuts alone. At this point, I have some questions about the current tax package as well as the areas that have been cut. I wouldn’t say that I am satisfied with the document we have today.”

His reaction came hours after officials representing nearly three-quarters of Connecticut municipalities said they expect to raise property taxes this summer if they do not receive significantly more state aid, and more than half said they also would be likely to cut programs and lay off workers.

The Connecticut Conference of Municipalities (CCM), which lobbies lawmakers on behalf of towns and cities, released the survey April 8 as more than 100 local officials converged on the state Capitol to press legislators to boost aid to municipalities and school districts.

Newtown First Selectman Joe Borst told The Bee he did not attend, and did not appoint anyone to attend the rally to represent Newtown. According to documentation from CCM, Newtown is facing a net loss of $724,287 or approximately ten percent from combined state cuts in the Pequot Mohegan Grant; PILOT funds that help subsidize the cost of untaxed state institutions like the Garner Correctional facility and the Governor’s Horse Guard headquarters, educational grants and town aid for road construction and improvements.

But the officials’ plea for more money comes as Connecticut faces up to $1 billion in red ink in the current state budget ending June 30, and as much as $8.7 billion in projected deficits over the next two budget years.

Mayors, selectmen and town managers in most of Connecticut’s 169 municipalities are well into planning their budgets for 2009-2010. Newtown’s budget proposal was adopted by the Legislative Council March 26, and the annual budget referendum is set for Tuesday, April 28.

The process of levying the taxes needed for local governments to, in effect, stay in business, culminates with this summer’s mailings of updated tax bills for homes, businesses and vehicles — in a state where unemployment has reached 7.4 percent and several major employers have warned of more layoffs.

Of 121 communities whose leaders answered the CCM survey, 71 percent said they will have to raise property taxes under the budget proposed by Governor M. Jodi Rell. If approved, Newtown’s proposed budget would raise property taxes just under one percent (0.99 percent).

Almost 79 percent said they have frozen hiring or plan to do so. More than half said they will lay off workers or cut discretionary programs such as library programs, full-day kindergarten and senior center activities.

Gov Rell did not immediately comment on the survey.

Cal Heminway, a member of Granby’s Board of Education, said he and other local elected officials “are at the bottom of the food chain,” fielding most of residents’ concerns about their finances and quality of local services.

“We are the most accountable to the voters, and clearly that’s been shown in the last couple of years as we’ve tried to fashion budgets,” said Mr Heminway, who is also president of the Connecticut Association of Boards of Education.

East Hartford Mayor Melody Currey, whose city is among those that does not yet anticipate raising taxes, said cuts in services and concessions from unions are the only factors making that possible.

“They’re already making less next year than they made this year,” she said of the workers. “We cannot ask our employees to do more, we cannot ask our citizens to do more.”

Susan Kniep, president of the Federation of Connecticut Taxpayer Associations, said that is exactly what is needed: forcing unions to make more concessions at a time when many taxpayers are facing late bills, job losses and foreclosures.

“There’s a lot of heartache going on throughout the country and certainly throughout the state of Connecticut, especially as we see the unemployment figures increase and people being forced out of their homes when they cannot pay the taxes they are already facing,” Ms Kniep said.

Gov Rell has proposed suspending the binding arbitration process in labor negotiations from July 1, 2009, to July 1, 2011, which would require General Assembly approval.

The state’s unions are negotiating on a package of concessions, but Connecticut’s municipalities have had mixed success in similar negotiations with unions for their local workers.

Ms Currey, a former state representative, is among many city and town leaders who once sat on the General Assembly they now say is too tightfisted with municipal aid.

Rep Lyddy said he remains hopeful that with bipartisan cooperation, a final budget plan can be worked out to better alleviate the tax burden on local towns and their taxpayers.

“Although the budget was passed through the Appropriations and Finance Committees, I am confident that further negotiations will take place before it is taken up in the House and Senate,” Rep Lyddy said. “Fortunately or unfortunately, depending on how one looks at it, this is still a work in progress.”

Rep Lyddy said now more than ever, the state needs leadership from both sides of the aisle to “address those areas where we still haven’t reached an agreement.”

(Associated Press Content was used in filing this report.)