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01/25/2017 08:30 AMAt the end of December, the state legislature in Hartford passed on $50 million in mid-fiscal year cuts to towns for municipal funding and Education Cost Sharing Grants (ECS). Deep River, Chester, and Essex all saw cuts to their ECS funding, while Chester and Deep River additionally were effected by a freeze on their Local Capital Improvement Program (LoCIP) grants. And while the three towns are facing very different impacts from the cuts, they are all considering similar strategies to cope.
LoCIP grants are capital improvement funds assigned to towns, which the towns can then use for particular projects. The grants are non-competitive, and towns are not obligated to use them during a particular period of time, so they can be saved up. According to Chester First Selectman Lauren Gister, Chester had not requested the use of any of their funds for three years and had approximately $70,000 accrued. However, as the state had awarded more than it was authorized to bond for, no further LoCIP funds will be designated in March and the accrued balances not already applied to projects approved by the Office of Policy and Management (OPM), were frozen.
Essex had applied to use its LoCIP funding and had their project approved before the cut-off, and will be using $40,105 from the grant for the milling and replacement of asphalt road on Bittersweet Lane, according to Essex Finance Director Kelly Sterner.
When it comes to the ECS funding cuts the largest cuts came from the top 25 wealthiest towns, according to a ranking calculation system used by the state. Essex falls within those towns, according to Sterner.
“Because we don’t, relatively speaking, receive a lot in educational cost sharing, it’s not as bad as it could be,” said Sterner. “The Region 4 and supervision district surplus offsets a good portion of the cut this year.”
Essex’s initial $160,658 ECS grant for fiscal year 2017 was cut by 34.6 percent, or $55,606, to $105,052. In comparison, Chester’s initial ECS grant was $687,975, and was cut by $28,759, or 4.2 percent to $659,216, and Deep River’s initial ECS grant for fiscal year 2017 of $1,704,633 was cut by 1.7 percent, or $29,541, to $1,675,092.
All three first selectmen echoed the sentiment that the Region 4 surplus cushioned the effects of the cut for this year, but that this move toward cuts by the state will affect the way they approach the town budgets for future years.
“The goal is to keep the budget as steady as possible,” said Gister. “We need to be fiscally conservative and responsible while also not stopping all plans for Chester’s development. This means we’ll have to think creatively about funding, and look for different grants, and not count on the state.”
“We’re going to have to pay attention to our dependence on the state going forward,” said Angus McDonald, First Selectman of Deep River. “We made out better than some neighboring towns. It’s not going to make a significant impact on this year, but we will look at next year differently.”
“The effect is more philosophical,” continued McDonald. “It is not appropriate for the state to do that [revise the budget after towns plan on receiving a certain amount of funding from the state]. It is not an appropriate way to govern small towns, especially.”
“It is easy to make the assumption that our towns, because they have been well-managed and have prudent reserves, are an easy target for cuts, said Essex First Selectman Norm Needleman. “but, given how much our residents pay in state income and sales tax – approximately $24 million – and how little we already receive from the state back – well under $1 million – I think we do our fair share and then some.”
“Generally speaking we are disappointed,” continued Needleman. “The cuts are difficult for municipalities to react to given that our budgets are already set. We hope that the new budget is more reliable and provides a higher level of certainty to the towns, and we hope they still appropriate money for our towns.”