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05/14/2019 12:00 AMDespite it being the first truly nice day this month, on May 11 a couple dozen residents spent a few hours inside Guilford High School for State Representative Sean Scanlon (D-98)’s second Citizens Budget Workshop. Residents worked together to try to balance the state budget and learned more from Scanlon about where the budget stands now as discussions continue up in Hartford.
Guilford already approved its municipal budget for the coming fiscal year, but the General Assembly is still in the throes of budget negotiations for the coming two-year state budget. The state budget needs to be approved by the end of the legislative session in early June and, while legislators will ultimately vote on that budget, Scanlon said its important for his constituents to offer ideas for balancing the state budget, too.
Scanlon held his first citizens budget workshop two years ago, before the last two-year budget was approved. At the event, residents were asked to try to balance the state budget, taking into account all of the fixed and flexible spending and revenue options.
“The basic premises is I had this crazy idea that we could essentially come up with a game that folks who are just citizens from all different walks of life and all different political backgrounds could sit down with their neighbors and work through this stuff in a very civil way, because that was something we could not seem to do in Hartford,” he said.
He told residents at this event that it was such a success that he knew it had to be held again.
“Everyone in my office thought this was the worst idea—they thought people were going to start punching each other and the cops were going to come, but instead this incredible thing happened, which was 9 of the 10 groups actually found common ground,” he said. “They took some Republican ideas and some Democratic ideas and they came up with a balanced budget…As soon as that happened in 2017, I went back to every single colleague I could...to tell them that if in two hours my constituents could figure this thing out, we could probably figure this thing out in two months.”
This time around, some of the key revenue and expenditure items residents were asked to consider include a cut or raise in the corporate, income, and sales taxes, implementation of items such as tolls or the legalization of retail marijuana, as well as a cut or increase in funding for affordable housing, mental illness, and Medicaid programs. Scanlon said he felt an event like this was important because there are a lot of competing interests in the state budget.
“I wanted to do this every two years because we do our state budget every two years. It is a $40 billion budget that we pass every odd year and the $40 billion represents everything you could imagine—all of the tax revenue that comes in and all of the spending that we do, it has to balance,” he said. “Unlike the federal government, we can’t kick the can down the road—the budget has to be balanced. We have about four more weeks to go because we have to constitutionally adjourn by June 5 or otherwise we go into special session.”
Budget negotiations are currently ongoing up in Hartford. With the session closing in just a few weeks, Scanlon says he hopes the legislature can hit deadline, hopefully with a bipartisan budget. Scanlon said he thinks this is a strong possibility because of some good revenue numbers.
“Basically the Office of Fiscal Analysis—a non-partisan entity—basically showed us that we are about $400 million over what our projected income tax collection was,” he said. “That is really good news. We have to not see the dollar signs flashing in our heads and go and spend all of that money right away, in my personal opinion, but the good news is that is the first time that has happened in a long time. What usually happens is we undershoot the projections. For the last 10 or 15 years, we would say it is going to come in at x level and then the bad news would come that we were $500 million short of where we thought we were going to be, causing these big deficits.”
Guilford and the State Budget
Governor Ned Lamont started the budget process with his own proposal in February. His budget, a proposed $43 billion, closes a projected multi-billion shortfall, broadens certain taxes, proposes shifting a portion of teacher pension costs onto towns, and lays the groundwork for tolls in future years.
The proposed budget does not increase the income tax and also eliminates the gift tax and proposes a roll back of the estate tax in future years. However, the budget includes a number of fee increases, an expansion of the sales tax, and sin taxes on items like vaping products, sugary drinks, and plastic bags.
Notably, the governor did not include the legalization and taxation of retail marijuana in his budget proposal.
Regarding municipal aid, the budget proposes to bump education grants by roughly $63 million over the two-year period. However, the budget proposal includes significant proposed cuts to Guilford’s state aid—along with other shoreline towns considered wealthy—particularly with the Education Cost Sharing (ECS) education grant. This year, Guilford received just over $2 million in the ECS grant, but the governor’s proposal would drop Guilford’s allocation down to $1,568,902 next year and then to $983,156 the following year.
The House Appropriations Committee recently released its own budget in response to the governor’s proposal. The Appropriations, or legislative budget, restores a significant amount of Guilford’s ECS dollars, putting the fiscal year 2020 allocation at $1,961,458 and the following years allocation at $1,766,527.
In addition, Lamont’s budget had included asking towns to start paying a portion of the teacher pension costs, but the legislative budget does not. Things can still change between now and June 5, but Scanlon said the legislative budget not relying on teacher pension contributions from towns is a strong message.
“I mean you can never say never until the session is over, but I think the legislature sent a pretty clear signal by not including that in our budget that this is not something that we want to do,” he said.