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Voices Speaking

August 23, 2017

Voices from the Capitol (XXXI): Municipal Aid Woes

Roger Senserrich

In today’s email:

Budget News: Municipal Grant Plans

In the absence of a budget, the Governor has the responsibility to issue executive orders detailing the distribution of state funding. Last week, the Governor issued an executive order addressing municipal aid.

In a normal year, state government distributes some of its first payments for municipal grants in September and October, based on the appropriated amounts for three major funding sources: the Education Cost Sharing (ECS) formula, the Payment in Lieu of Taxes (PILOT) grant, and the Municipal Revenue Sharing Account (MRSA).

This year, the Governor indicated that he sought to protect the Alliance school districts (that is, the 30 lowest performing and for the most part less affluent school districts) from reductions in state funding. The full picture is, however, far more complicated. Although the allocation of some of the funds has prioritized holding low-income communities and their residents harmless, overall the combined impact of changes in the municipal allocations means steep reductions in funding to some of the state’s poorest communities.  

Education Cost Sharing

For ECS payments, Governor Malloy has decided to keep ECS funding levels for the 30 alliance districts unchanged, cutting funding for the rest. The wealthiest districts have seen their state education payments zeroed out; other districts will see considerable cuts. The CT Mirror has a map detailing the town-by-town impact here. The total funding reduction, compared to fiscal year 2017 (FY17), is $139 million in October, when municipalities receive a quarter of their ECS funding. What is not clear from this chart of town-level cuts is the gap between funding and need - a gap that cannot be calculated without a clear funding formula detailing the cost of an adequate education and providing a cost sharing formula.  

Although the changes to ECS funding do protect low-income communities from cuts, how funding would be distributed highlights the need of developing a funding formula that truly accounts for education costs and needs. The current budget crisis makes even more urgent the  General Assembly’s responsibility to adopt an effective ECS formula that provides equitable funding to all school districts, based on comprehensive adequacy study that considers need, local fiscal capacity and a detailed cost analysis.

PILOT and Municipal Revenue Sharing Account

The Governor’s plan dramatically reduces PILOT and MRSA funding. Unlike the ECS funding changes, these cuts will reduce funding for all municipalities, with poorer cities and towns suffering the brunt of the cuts.

Through PILOT, Connecticut partially compensates municipalities for a state law that removes state, university, and hospital property from local tax rolls. Most tax-exempt property is concentrated in low-income urban areas; as a result, the elimination of PILOT funding will hit the state’s most vulnerable communities the hardest. Again, the cities with the least resources will have to bear most of the burden of supporting key state infrastructure. The PILOT cuts total $182 million; 80 percent of that funding would have gone to Alliance districts.

The MRSA is a state grant that shares a portion of sales tax revenues with municipalities and compensates them for state-mandated revenue losses. The Governor’s proposal eliminates the MRSA’s October sales tax transfer ($128 million) and additional PILOT funding ($44 million) but partially preserves its compensation for capping local mill rates for motor vehicles.

The full list of cuts is available here, and it is clear that even with the ECS limiting harm to the poorest towns, the combined effect of PILOT and MRSA cuts will prove devastating to many cities, putting considerable pressure on municipal budgets. The PILOT will be especially damaging to cities like Hartford or New Haven that have a high percentage of tax-exempt property. Hartford will lose $69 million in funding (including the Mashantucket Pequot and Mohegan Fund Grant, also zeroed out); New Haven, $68 million; Bridgeport, $32 million; and Waterbury, close to $30 million. Unless the General Assembly addresses the budget delays soon, cities and towns will soon be forced to raise taxes or enact painful cuts.

The Need for Reform

The impact of these proposed cuts and the inconsistent ECS funding provide a stark reminder of the need for property tax reform. Connecticut’s municipalities are heavily dependent on their property wealth to pay for local services. Economic and racial segregation, as well as the concentration of many of our state’s key institutions (universities, state government, hospitals) in urban areas, create huge disparities in fiscal capacity between towns, only partially compensated by a hodgepodge of state grants and funding formulas that fail to address the root causes of these disparities.

We proposed, earlier this year, a property tax reform that would provide adequate, equitable funding for education for all children in the state, as well as promote economic growth in urban areas. Lawmakers should consider long-term, structural changes to the property tax system as a first step to address the state’s economic woes.

Coming Up: More Budget Proposals

The budget negotiations appear to be moving forward, albeit slowly. House Democrats will present a new budget proposal this week, with the intention of holding a vote between September 11 and 14. If passed, the Senate would vote the following week. If the General Assembly does not approve a budget by August 22, it will make it the longest budget debate in state history.

We do not have much information on what is included in the new budget proposal other than changes to the sales tax. A consensus seems to be emerging, however, between House and Senate Democrats on the need to raise new revenue to balance the budget, instead of just relying on cuts. Expect a detailed analysis once the proposal is made public in the coming days.

Still Important: Call Your Legislators

These impending cuts should give us a new sense of urgency. If no budget is approved before the end of September, Connecticut’s cities and towns will face an unprecedented fiscal cliff. State services have endured cuts, furlough days, and layoffs since June. Come October, school districts, cities and towns would be forced to do the same. The impact for children and families across the state would be devastating.

As negotiations slowly move forward, we should keep reaching out to legislators to tell them that it is time for Connecticut to approve a budget that makes children and working families in the state its priority. We need a balanced budget approach that includes both a sound strategy for state spending and new revenue so Connecticut can preserve crucial services and build a strong foundation for the future.

Click here to find your legislator - contact them today.

Want More Action Alerts?

As the budget negotiations continue, we will be sending more action alerts to our "Voices from the Capitol" mailing list. Make sure you are subscribed here.

What We Are Reading / Listening To

Issue Areas:
Budget and Tax, Education
August 16, 2017

Voices from the Capitol (XXX): A Nation Built on an Idea

Ellen Shemitz, J.D. and Roger Senserrich

In today’s email:

A Nation Built on an Idea

Ellen Shemitz, Executive Director, Connecticut Voices for Children

The United States of America is a nation built on a single, powerful idea: all people are created equal. That idea drives much of our work here at Connecticut Voices for Children. We fight every day to bring down barriers to opportunity and to advance policies that will ensure that every child in our state has a meaningful chance to achieve her or his full potential.

Over the years, our work has come to focus increasingly on issues of race and racism: the institutional barriers that children and families of color face on a daily basis in our state. This work often creates discomfort and at times denial. But, if the events this weekend in Charlottesville teach us anything, they must teach us the importance of recognizing and taking action against the forces of bigotry, intolerance, and racism in every form.

Today in Connecticut, many racist policies and laws remain on the books. Did you know that two-thirds of people of color in Connecticut are concentrated in 8 percent of towns in the state? This did not happen by accident. Local control, a much valued system in New England, has allowed the perpetuation of racist zoning policies. State and local laws and policies shape access to schools, health care, and opportunity across Connecticut. Criminal justice practices discriminate against minorities. Economic disparities and job opportunities leave people of color behind.

The risk today is greater than at any time in my lifetime. Just this afternoon we received notice that the Trump Administration has targeted a key civil rights provision, suspending a housing rule that would have allowed more low income families to find housing in higher opportunity neighborhoods. It is not just white nationalists carrying tiki torches who undermine our core values: it is often the more subtle and less discernible actions that cause the most harm over time.  

It is time to end all this. Together, we can build a Connecticut that is welcoming, diverse, and inclusive. Equitable growth and opportunity should be the cornerstones of our work. It is the right thing to do; it is the smart thing to do - and each of us can play a role in making it happen.

 

Budget Update: Nothing New

No real budget news these past few days, and no news expected this week either, as legislative leaders have not scheduled any meetings. State finances are still managed by executive order, with across the board cuts on services now and deeper cuts to municipal aid and education this fall. No budget deal is now expected until at least mid-September.

The CT Mirror has an excellent article Monday that provides an overview of municipal finances, with a detailed calendar of when local governments will lose funding from each grant, and how big the cuts will be. The first major cut will be PILOT funding (Payment In Lieu of Taxes, the funds that municipalities receive to compensate them from tax exempt properties), which goes out next month.Things get worse from there.

These impending cuts should give us a new sense of urgency. Negotiations might be on a lull, but we should keep reaching out to legislators to tell them that it is time for Connecticut to approve a budget that makes children and working families in the state its priority. We need a balanced budget approach that includes both a sound strategy for state spending and new revenue so Connecticut can preserve crucial services and build a strong foundation for the future.

Click here to find your legislator - contact them today.

Want More Action Alerts?

As the budget negotiations continue, we will be sending more action alerts to our "Voices from the Capitol" mailing list. Make sure you are subscribed here.

 

Federal Preview: a Busy Fall

Congress is in recess during August. Once they are back in Washington next month, however, they are going to have a lot of issues on their plate, almost all of them having a direct impact on children and families. We will talk about them in more detail as they come up next month, but it is important to have a good sense on how busy the agenda is going to be. Considering how little legislative bandwidth Congress has shown so far this year, it is going to be a challenge.

Congress will have four main issues to address this fall. First, the budget resolution for fiscal year 2018. A first version, including dramatic cuts to programs for low-income children and families was passed by the House Budget Committee. It contains reconciliation instructions for tax reform legislation (more on that in a bit). It is unclear if House and Senate leaders have the votes to pass a budget right now, meaning that they might need to pass continuing resolutions to avoid a government shutdown by September 30th. One of the many important programs pending to be voted on is CHIP, the Children’s Health Insurance Program which helps pay most of the costs for children’s health care in the HUSKY B program.  

In addition, Congress must raise the debt ceiling before September 29th, or risk a default and an unpredictable financial crisis. Debt ceiling increases are usually “clean”, without strings attached, but we have seen fierce debates in the recent past.

Tax reform is next on the list. There is no word yet on what this is going to include, other than tax cuts for high-income earners paid by cuts to social programs. Leadership wants to include reconciliation instructions in the budget resolution enabling the Senate to pass the tax cuts with 50 votes instead of the usual 60.

Finally, the Affordable Care Act (ACA) repeal effort might have failed, but Congress could try again later this year, and the administration has threatened to undermine the law even without Congress’s help.There has been talk of a possible bipartisan plan to stabilize the ACA markets, including Connecticut’s Access Health CT, but it is too early to tell whether or what this will mean for those who purchase coverage through the exchanges.

 

What We Are Reading / Listening To

Issue Areas:
Budget and Tax, Health
August 14, 2017

Voices from the Capitol (XXIX): Contact Your Senator Today

Roger Senserrich

August 7, 2017

In today’s email:

Action Alert: Contact Your Senator Today

The Senate Democrats are going to be caucusing tonight at 6:00 about the budget.

It is important that Senators hear from people in their districts - we urge you to call and tell your Senator that you are opposed to program cuts.

Click here to find the contact information of your State Senator, and tell him or her that it is time to pass a budget that puts children and families first. Program cuts in education, social services, health care, early childhood, or mental health are damaging and short-sighted. Connecticut needs a budget that includes new revenue, not just cuts, following a balanced approach that combines new revenue with strategic spending in opportunity and equitable growth.

It is important for Senators to hear from you today before their caucus to strengthen their resolve to preserve important programs. Click here to find your legislator.

Want More Action Alerts?

As the budget negotiations continue, we will be sending more action alerts to our "Voices from the Capitol" mailing list. Make sure you are subscribed here.

Budget Update: Concessions

Last week, the Connecticut General Assembly took an important first step towards closing the budget gap when both chambers narrowly approved the labor concessions deal struck by the Governor and public sector unions. The agreement represents $1.57 billion in savings over the next two years in exchange for extending the current contract to five years (to 2027).

This means that lawmakers are now facing a $3.5 billion two-year budget gap instead of a $5 billion one. The agreement reduced the budget deficit by close to a third; the rest will have to be eliminated by program cuts and/or tax increases. Legislators still face a challenging budget picture, but this agreement makes it a bit less daunting. Now is the time for you to take action as requested above: let’s make sure the remaining budget gap is not closed on the backs of vulnerable children and families.

Budget Updates: New Developments

Outside the labor agreement, budget negotiations continue apace behind closed doors. Currently there seem to be three main points of contention: a possible sales tax increase, fiscal reforms, and municipal aid. All three issues are linked; a portion of the sales tax funds municipal aid, and local governments have been looking for ways to become less dependent on property taxes.

Right now, however, there is no immediate consensus on how to raise the sales tax. Our position is that lawmakers should expand the tax base, eliminating exemptions to raise more revenue. House leaders have proposed increasing the current rate by half a point on top of an additional one-percent surcharge for restaurants. Municipalities, however, oppose that move. We expect these proposals to evolve as negotiations continue.

Aside from these debates, the General Assembly does not have a timeline for a budget vote. It is unlikely that we see a budget before September.

The Cost of Not Having a Budget

The lack of a state budget is starting to take its toll in many programs and services. Many social service programs run under contract by nonprofits are facing service reductions and furloughs. Crucial programs for children and families like Care 4 Kids remain closed to new enrollments.

Without a budget, municipalities will face deep cuts in October, when the first Education Cost Sharing payments are sent out. Governor Malloy outlined a $506 million cut in these payments in his executive order; last week he announced that he intends to protect funding for the lowest-performing districts. This would protect poorer cities and towns from the worst cuts, but will represent potentially higher impacts for other school districts.
 

The ACA Might Be Safe

Senate Republicans voted on three separate plans to repeal the ACA. All three plans were voted down, forcing Senate leaders to withdraw the bill and halt their repeal efforts.

It has happened before. The ACA repeal bill has suffered repeated setbacks, only to come back for another vote later. This time, however, seems to be different. Despite repeated exhortations from the White House asking legislators to persevere in their repeal effort, Senate leaders are talking about focusing on tax reform (some of the proposed changes carry a big risk for Connecticut, incidentally) and introducing some bipartisan fixes to the ACA. It is a big shift from where the debate was two weeks ago, and a very strong signal that the ACA might be safe for now.

There are still some risks on the horizon. The Trump administration is in charge of implementing the ACA, and they have openly talked about weakening the system by not enforcing the individual mandate, cutting key payments to insurers, and scaling back their outreach efforts. Most of these measures would impact the individual insurance market, not Medicaid, but could potentially have significantly impact access to health care.

The good news, however, is that the ACA is here to stay. If you have time, call your Representative or Senator and thank them for their efforts to protect the ACA.

CT Voices News: New Staff!

Connecticut Voices for Children has three new staff members: Karen Siegel, Public Health Policy Fellow; Camara Stokes Hudson, Associate Policy Fellow; and Nipuni Gomes, Communications and Development Assistant.

These new hires will bolster Connecticut Voices for Children’s research in health care, juvenile justice, and education policy, producing high-quality, data-based analysis, as well as enhancing the organization’s strategic communications capacity. Click here to download the press release.

What We Are Reading / Listening To

Issue Areas:
Budget and Tax, Early Care, Health
August 14, 2017

Voices from the Capitol (XXVIII): Another ACA Battle

Roger Senserrich

July 27, 2017

In today's email:

 

ACA Repeal Update: Again, at risk

Last week, the Senate effort to repeal the Affordable Care Act (ACA) seemed all but dead. Several key “moderate” senators remained opposed to a bill that would have left 22 million people without health insurance and slashed funding for Medicaid; leadership postponed the bill. We warned, however, that the fight was far from over - the bill had suffered setbacks in the House and the Senate before, only to come back for a vote at a later date.

After some last-minute negotiations, it looks like Senate leaders will try again to vote on the repeal this week, with a “motion to proceed” as early as tomorrow. This means that the ACA is again at risk of being repealed.

There are currently two versions under consideration: a full repeal of the ACA (or at least elimination of all parts of the ACA that are budget-related to comply with reconciliation rules), and a repeal-and-replace bill, similar to the one that was approved in the House. The former would leave 32 million people uninsured by 2026 compared to the ACA; the latter would leave 22 million without coverage.

It is troubling that we do not know what repeal proposal the Senate will be voting for yet; Senate leadership has not disclosed either the language of the bills or which bill they intend to bring to the floor. There are also questions regarding what can be included in the repeal-and-replace bill after the Senate Parliamentarian ruled that several of its key provisions cannot be passed using the current legislative procedure. It is unclear if either proposal has the votes to pass, and it is disturbing that no one (Senators included) seems to know what is happening - but the ACA is again at risk.

What can you do to help stop this bill?

  • Connecticut’s U.S. senators are opposed to the repeal efforts. We encourage you to call them to share your story about why the ACA is important and thank them for their support. You can find their contact information here.
  • Do you have any friends or relatives who live in states represented by Republican senators? Call your friends and family, reach out to them through social media, email them, and urge them to call their senators. Tell them to share their stories, and to urge the senators to oppose the repeal. This is going to be a very close vote; every single call helps.

 

Want More Action Alerts?

As the budget negotiations continue, we will start sending more action alerts to our “Voices from the Capitol” mailing list. Make sure you are subscribed here.

 

The State Budget: Labor Contracts

The General Assembly is in session today, with two items on its agenda. First, they will try to override the Governor's veto of some of the bills they passed during the  session. Second, the House intends to vote on the $1.57 billion labor savings package.

The labor savings package is one of the many moving pieces in the budget negotiations. If the General Assembly ratifies it, Connecticut will still face a $3.5 billion budget gap. Still a huge challenge, but less daunting than the $5 billion deficit without the agreement. You find more information on the specifics of the agreement here.

What happens if the General Assembly doesn’t approve the agreement? If they vote it down, it goes back to the drawing board. If they do not take it up for a vote, the agreement will take effect 30 days after the next legislative session begins - that would be March 1st, 2018. This would mean that the savings included in the agreement would be lower, as the current, more expensive contract would remain in place until then. If the House votes on the agreement today, the Senate is expected to vote next Monday, July 31st.

Meanwhile, the ripple effects of not having a budget are reaching municipalities. Nearly half of cities and towns participating in a recent survey have frozen spending or cut services.  

 

Action Alert: A Budget that Puts Families First

Connecticut’s children and families need your help. Call your legislators today, and tell them that Connecticut needs a budget that puts families first, with a balanced approach that includes new revenue.

Click here to find your legislator’s contact information. Click here for more information on revenue options for Connecticut and talking points for your call.

 

New Report: the Impact of Quality Early Education

In our new report, we assess the quality of Connecticut's early childhood system.

Every child deserves a strong start in life: children need to enter kindergarten healthy, happy, and eager to learn. That requires high-quality early care: research shows that early childhood represents a window of explosive learning that can set the course for a lifetime.

Providing quality care for young children benefits parents, children, childcare workers, and the state economy. In the first issue brief in this series, we estimated that if all young children who need child care were in high-quality settings, the state would gain $13.4 billion in long-term returns.

In this second brief, we delve deeper into the question of what is meant by "high-quality" settings. We review the literature analyzing the components of high-quality early care and education (ECE), assess the extent to which Connecticut's center-based early care programs meet those standards, and make recommendations for how Connecticut can continue expanding both quality and access.

You can download the report here.

 

What We Are Reading

Issue Areas:
Budget and Tax, Education