More Honey In The Pot

Our federal, state, and local governments have become the three bears of debt. Papa Bear in Washington hibernates deep in a national debt of $7.3 trillion that increases by $1.73 billion every day. Mama Bear in Hartford spends more on interest payments than on health care and hospitals or prisons. And Baby Bear in Newtown, even with its comparatively itty-bitty debt, is considering capital projects that will put pressure on its self-imposed cap on debt service payments (ten percent of total expenditures). So when word gets out that the state has a $200 million surplus in its honey pot, it was quite understandable that Gov Jodi Rell found her office crowded with baby bears from around the state on Monday. (For Papa Bear, $200 million isn’t even worth waking up.)

Adapting quickly to her new role as Good Mama Bear, Gov Rell welcomed the mayors and first selectmen, members of the Connecticut Conference of Municipalities, and the Council of Small Towns, but quickly informed them that the estimated $200 million state budget surplus would be saved for a rainy day. The state’s rainy day fund has been completely exhausted in recent years as state leaders looked for remedies to their budget problems.

Using the state surplus to help smooth out the rocky fiscal terrain in the coming years is exactly what the governor should do, and the local leaders seemed to understand. They were just happy to get their foot in the door of the governor’s office. Like campaign reform advocates earlier in the month, they were amazed to suddenly have access to the governor’s office, which seemed reserved for political insiders, large contributors, and an assortment of yes-men during the Rowland administration.

Gov Rell is getting a lot of political mileage and good press out of making room at her conference table for those with opposing points of view. If this new openness in Hartford is to mean anything, however, the frank discussions will have to give way to serious negotiation and compromise —especially in the area of the state’s relationship to towns and cities.

Connecticut taxpayers pay more in property taxes that they do personal income tax or sales taxes. Local education expenditures account for between a half and two-thirds of all local government spending in Connecticut. Nationwide, states provide just over half of the revenues required by public schools, with towns, cities (and counties in many states), paying about 42 percent; in Connecticut those numbers are reversed. The latest figures from the National Center for Education Statistics (FY 2000) show that Connecticut’s local public education system is more reliant on the local property tax than all other states. Since 1990, the state’s share of local education costs has decreased from more than 45 percent to less than 40 percent in 2003.

Clearly Connecticut relies more on towns and cities to pay for basic educational services than other states. By relentlessly shifting more and more costs to municipalities by perennially underfunding state aid to schools, state leaders have found an indirect way to levy taxes — property taxes — for which they will not be held politically responsible. The governor and the legislature need to acknowledge their part in the growth of property taxes in Connecticut and not just meet with first selectmen and mayors, but meet their demands for serious property tax reform initiatives.

Tax reform is ultimately spending reform. By more closely monitoring what our governments spend (and borrow) and by demanding that they work together efficiently to take collective responsibility for essential services, we can, in the end, provide a little more honey in the pot for everyone.