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Malloy ends Norwalk dire predictions of October ECS funding shortfall

Gov. Dannel Malloy. (File photo)

Updated, 6 p.m.: Comment from Mayor Harry Rilling.

NORWALK, Conn. — Gov. Dannel Malloy has restored the state’s education funding to its 2017 levels, reversing an executive order he released in June.

This means that Norwalk will not be shortchanged in its Educational Cost Sharing (ECS) October payment, as many had feared. However, Mayor Harry Rilling expressed concerns about other state funding grants.

“The Governor’s announcement today that Norwalk will receive its full education aid payment is welcome news and will secure our investments in our students, and provide a level of budget clarity and certainty prior to the start of the school year,” State Senate Majority Leader Bob Duff (D-25) said Friday afternoon in a statement.

Malloy’s June order led many to say that Norwalk’s funding was being cut by $4.4 million. Norwalk Superintendent of Schools Steven Adamowski on Tuesday referred to a $6 million Educational Cost Sharing (ECS) formula cut.

Board of Education Chairman Mike Lyons said Monday that if Malloy’s executive order remained standing, NPS would begin slashing its budget with a list of cuts the BoE formulated in July, but that “wouldn’t get us half way to what we’d need to cut to close a $4.4 million gap.”

Malloy on Friday morning released a revised Executive Order Resource Allocation Plan, along with new municipal aid distributions.

“The changes accommodate the restoration of $40 million to private, nonprofit health and human service providers, prioritizing education funding to communities with the highest student needs by holding harmless the 30 Alliance Districts, and $60 million of other adjustments that must be made to ensure that the state lives within its limited means under the executive order,” a press release said.

Adamowski on Tuesday highlighted the planned cuts to Alliance District funding and announced a plan to cut half of Norwalk Public School’s Curriculum and Site Instructional Directors (CISDs) as a proactive measure.

“The latest release from the governor’s office indicates we will be receiving all of our Alliance District money as well as all of our ECS funds,” Rilling said Friday afternoon in an email.“There is a question as to what the situation will be if there is not a budget passed by the first or second week of September. It seems we may lose our PILOT {Payment in Lieu of Taxes} money as well as a portion of our municipal revenue-sharing.”

Malloy’s June executive order was released in the absence of an approved state budget. It would have been reversed if the legislature approved a budget, but no agreement has been attained by state legislators.

“Democrats in the Senate have been working hard to produce a balanced budget that meets the needs of our cities and towns. We intend to caucus with our members next week and continue the progress we have made toward reaching a final agreement,” Duff said in a statement.

Malloy’s press release said:

“The revised plan and municipal aid estimates will be the basis for state spending for Fiscal Year 2018 in the unlikely event that a state budget is not enacted.  It is intended to provide municipalities, providers, and state agencies with some certainty about what funding to expect until a budget is adopted.

“’In the absence of an adopted budget from the General Assembly, my administration is reallocating resources to pay for basic human services, education in our most challenged school districts, and the basic operation of government,’ Governor Malloy said.  ‘The municipal aid that is funded as part of this executive order reflects the nearly impossible decisions Connecticut must make in the absence of a budget.  It will force some of our municipalities – both large and small – to make similarly difficult choices of their own.’

“In order to restore $100 million, the administration made the following changes:

 

  • “Allocating the Special Education Excess Cost Sharing Grant at approximately the Fiscal Year 2017 levels.
  • “Providing $1.46 billion in Education Cost Sharing (ECS) grants to the communities with the highest student needs and the greatest reliance on state funding.  It holds the 30 Alliance Districts harmless and provides a grant equal to the Fiscal Year 2017 level.  On average, 22.24 percent of municipal expenditures are funded with revenue from the state.  The 54 non-alliance towns with a greater reliance on state funding, above the 22.24 percent statewide average, will receive a portion their Fiscal Year 17 ECS grant, and the 85 municipalities that have a lower reliance on state funding will receive no ECS grant.  A total of 25 percent of the ECS payments will be made in early October.
  • “For Municipal Revenue Sharing (MRS), grants of $40.6 million will be provided to municipalities for the tax loss resulting from a 37 mill rate cap on motor vehicle property taxes.  This grant will be paid in mid-October when there are sufficient revenues in the MRS Account.  At this time, no grants for the Additional Payments in Lieu of Tax Grants or Revenue Sharing Grants will be made from MRS.

“The Governor continued, ‘This has never been my preferred path.  I have proposed full balanced budgets and also short-term solutions that would alleviate some of this pain.  It is incumbent upon state leaders to come together and reach an agreement on a biennial budget right away.’

“In June, in the absence of an adopted state budget or even a stop-gap mini-budget that would have allowed the state to proceed with an appropriations act, a capital budget, revenue changes, and necessary legislative changes, Governor Malloy released an Executive Order Resource Allocation Plan.  Under the limited powers of executive authority, the plan could not change statute, alter revenue, or deviate from existing legal covenants, but could only allocate resources based on availability to satisfy the most pressing obligations on the state.

“Due to these constraints, approximately $100 million in payments to private nonprofit providers who provide services across DSS, DDS, DCF, DMHAS, DOH, DOC, DORS, SDA and Judicial were cut.  Unfortunately, the providers have not been able to withstand these cuts without unacceptable cuts in services.  In response, the administration will restore $40 million to continue funding vital services to our most vulnerable residents.  Additionally, there were another $60 million in expenditures that needed to be restored to ensure adequate resources to meet state obligations.”

“I have my finance director reviewing the latest release to determine the exact impact on our community based on our 2017–18 budget,” Rilling said. “I’m still optimistic that we will have a budget and the governor’s executive order will be lifted.”

20170818 EO Resource Revisions

Original story: 

NORWALK, Conn. — Gov. Dannel Malloy has restored the state’s education funding to its 2017 levels, reversing an executive order he released in June.

This means that Norwalk will not be shortchanged in October, as many had feared.

“The Governor’s announcement today that Norwalk will receive its full education aid payment is welcome news and will secure our investments in our students, and provide a level of budget clarity and certainty prior to the start of the school year,” State Senate Majority Leader Bob Duff (D-25) said Friday afternoon in a statement.

Malloy’s June order led many to say that Norwalk’s funding was being cut by $4.4 million. Norwalk Superintendent of Schools Steven Adamowski on Tuesday referred to a $6 million Educational Cost Sharing (ECS) formula cut.

Board of Education Chairman Mike Lyons said Monday that if Malloy’s executive order remained standing, NPS would begin slashing its budget with a list of cuts the BoE formulated in July, but that “wouldn’t get us half way to what we’d need to cut to close a $4.4 million gap.”

Malloy on Friday morning released a revised Executive Order Resource Allocation Plan, along with new municipal aid distributions.

“The changes accommodate the restoration of $40 million to private, nonprofit health and human service providers, prioritizing education funding to communities with the highest student needs by holding harmless the 30 Alliance Districts, and $60 million of other adjustments that must be made to ensure that the state lives within its limited means under the executive order,” a press release said.

Adamowski on Tuesday highlighted the planned cuts to Alliance District funding and announced a plan to cut half of Norwalk Public School’s Curriculum and Site Instructional Directors (CISDs) as a proactive measure.

Malloy’s June executive order was released in the absence of an approved state budget. It would have been reversed if the legislature approved a budget, but no agreement has been attained by state legislators.

“Democrats in the Senate have been working hard to produce a balanced budget that meets the needs of our cities and towns. We intend to caucus with our members next week and continue the progress we have made toward reaching a final agreement,” Duff said in a statement.

Malloy’s press release said:

“The revised plan and municipal aid estimates will be the basis for state spending for Fiscal Year 2018 in the unlikely event that a state budget is not enacted.  It is intended to provide municipalities, providers, and state agencies with some certainty about what funding to expect until a budget is adopted.

“’In the absence of an adopted budget from the General Assembly, my administration is reallocating resources to pay for basic human services, education in our most challenged school districts, and the basic operation of government,’ Governor Malloy said.  ‘The municipal aid that is funded as part of this executive order reflects the nearly impossible decisions Connecticut must make in the absence of a budget.  It will force some of our municipalities – both large and small – to make similarly difficult choices of their own.’

“In order to restore $100 million, the administration made the following changes:

  • “Allocating the Special Education Excess Cost Sharing Grant at approximately the Fiscal Year 2017 levels.
  • “Providing $1.46 billion in Education Cost Sharing (ECS) grants to the communities with the highest student needs and the greatest reliance on state funding.  It holds the 30 Alliance Districts harmless and provides a grant equal to the Fiscal Year 2017 level.  On average, 22.24 percent of municipal expenditures are funded with revenue from the state.  The 54 non-alliance towns with a greater reliance on state funding, above the 22.24 percent statewide average, will receive a portion their Fiscal Year 17 ECS grant, and the 85 municipalities that have a lower reliance on state funding will receive no ECS grant.  A total of 25 percent of the ECS payments will be made in early October.
  • “For Municipal Revenue Sharing (MRS), grants of $40.6 million will be provided to municipalities for the tax loss resulting from a 37 mill rate cap on motor vehicle property taxes.  This grant will be paid in mid-October when there are sufficient revenues in the MRS Account.  At this time, no grants for the Additional Payments in Lieu of Tax Grants or Revenue Sharing Grants will be made from MRS.

“The Governor continued, ‘This has never been my preferred path.  I have proposed full balanced budgets and also short-term solutions that would alleviate some of this pain.  It is incumbent upon state leaders to come together and reach an agreement on a biennial budget right away.’

“In June, in the absence of an adopted state budget or even a stop-gap mini-budget that would have allowed the state to proceed with an appropriations act, a capital budget, revenue changes, and necessary legislative changes, Governor Malloy released an Executive Order Resource Allocation Plan.  Under the limited powers of executive authority, the plan could not change statute, alter revenue, or deviate from existing legal covenants, but could only allocate resources based on availability to satisfy the most pressing obligations on the state.

“Due to these constraints, approximately $100 million in payments to private nonprofit providers who provide services across DSS, DDS, DCF, DMHAS, DOH, DOC, DORS, SDA and Judicial were cut.  Unfortunately, the providers have not been able to withstand these cuts without unacceptable cuts in services.  In response, the administration will restore $40 million to continue funding vital services to our most vulnerable residents.  Additionally, there were another $60 million in expenditures that needed to be restored to ensure adequate resources to meet state obligations.”

One comment

Bryan Meek August 19, 2017 at 8:16 am

I see others taking victory laps on this. I hope this isn’t premature. The legislature can still move the goal posts. But if nothing is done, the state still needs to address the $4 million Priority School District grant that was cut to zero.

Sorry for sounding less than magnanimous, but this seems like a rearranging of the deck chairs and Norwalk was lucky to get on a life boat for the time being.

Notwithstanding some efforts at justice, the fact is we are still $23 million short changed on funding. To get the ECS of $4.4 restored, we also lost out on the Excess grants we had factored into the budgets.

It seems the city also stands to lose out revenues on its side, so we may still end up with a property tax increase or having to draw down rainy day funds.

The more alarming thing is that there is still no mention of how the state closes its $3.5 billion budget deficit. Income taxes? Sales taxes? This might looks and feel good short term, but if the rest of the state is being washed down the drain at some point it will drag us with it.

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