Norwalk leaders say Malloy’s budget is misleading

Updated 6:55 p.m., letter added, grant named

NORWALK, Conn. – Increased funding to Norwalk from the state of Connecticut as proposed by Gov. Dannel Malloy looks good but doesn’t stand up to inspection, city leaders say.

“He put 20 in one pocket and took 40 out of the other,” Mayor Richard Moccia said.

Moccia was one of several big city mayors – both Democrat and Republican – to protest Gov. Dannel Malloy’s proposed biennial budget Friday at a Connecticut Conference of Municipalities press conference, according to news reports. Moccia is quoted as saying Malloy’s budget is not a budget for the cities, it’s one for the state.

Malloy said in a letter sent to the municipal leaders Friday that his plan sends “at least the same amount of state dollars” to cities and towns as they currently receive.

“It’s true that aid comes in different ways, which will necessitate adjustments on your end,” he said in the letter. “But at a time when states across the country are decimating local aid, no city or town in Connecticut will receive less total funding from the state than it did last year, and many will receive more.”

But Moccia and other Norwalk leaders say that while Malloy plans to increase ECS (Educational Cost Sharing) funding, other grants are reduced or eliminated. They also worry that ECS funds “come with strings attached.”

Finance Director Thomas Hamilton gave an accounting of the grant funding decreases at Monday’s Board of Estimate and Taxation meeting:

•The Payment In Lieu Of Taxes (PILOT) grant on state owned property go from $347,000 to zero
•The Mashantucket Pequot/Mohegan Fund grant would be eliminated, a loss of $853,000 to Norwalk
•The public school transportation grant would go from $69,000 to zero. The manufacturing transition grant of $320,000 would be eliminated
•The revenue sharing grant would go from $621,000 to zero.

Hamilton said the state’s LoCIP (Local Capital Improvement Program) grant to Norwalk would increase from $628,000 to $1.54 million under Malloy’s proposal. “That’s a pretty sizable increase, $852,000,” he said. “Frankly, the reason he did that is the state pays for the LoCIP grant out of bond funds” and rules restrict the funds to being used for capital budget items.

But the governor’s letter said changes to the rules governing the funds would allow municipalities to use the LoCIP money for some items normally funded through the operating budget.

“We have made LoCIP funds more flexible, so that local governments can apply some or all of the capital equipment and technology purchases they routinely make out of their operating budgets to their LoCIP allocation,” he said. “These include snow removal equipment, regional initiatives, education money and school safety. Moreover, the proposal would allow municipalities to seek reimbursement in 2014 for these eligible expenses that were incurred in 2013.”

If Norwalk gets the entire increase in ECS funding that Malloy is planning – $1.7 million, plus additional funding for Norwalk as an alliance district – it will see an increase of $190,000 in state funding to its operating fund, Hamilton said. If not, the city could be “behind millions.”

Management and Budgeting Director Bob Barron reminded everyone that the governor’s proposal has many steps to go through. “It’s only his recommendations and they have an appropriations process, just as we do locally,” he said. “… We don’t know how many of his recommendations or if the cuts for aid will be approved.”

BET Chairman Fred Wilms agreed. “For the next 2½ months we have to keep in the front of our mind that the other shoe may drop,” he said. “It’s going to create significant uncertainty in our budget process.”

Malloy’s letter to municipal leaders