State Cutbacks In School Funding Make Newtown’s Budget Squeeze Even Tighter

By Steve Bigham

Since 1996, the State of Connecticut has managed to cut nearly $2 billion in taxes, all the while achieving record-breaking surpluses. However, the latest statewide figures reaffirm that Hartford’s good fortune has, in part, been built on the backs of local property owners, particularly those in towns like Newtown.

According to an analysis of mill rates by the Connecticut Conference of Municipalities (CCM), 81 percent of the state’s cities and towns were forced to increase property tax rates for the current year. A major contributing cause of these property tax hikes, according to CCM, has been the “inadequate funding” of state aid, particularly state support of local public education.

Closer to home, Newtown’s state aid for education has dropped from 24 percent of the budget in 1991 to about 11 percent this year.

“People want tax cuts – no doubt about that – but when they find out those cuts came at the expense of teachers, books, and refurbishing schools, then they have second thoughts,” noted CCM’s Kevin Maloney.

What’s worse, when the state fails to adequately fund education, it ends up affecting a town’s general fund for things like new roads, building maintenance, etc.

“You really question what’s going on up there. It’s almost like if you’re in a town that has growth you’re being penalized for that growth,” noted Public Works Director Fred Hurley, who has seen more than his share of road funds cut. “What we try and do is build up a balanced program so that even if we do take hits we don’t get hit too hard in one area.”

In Newtown, state aid for education per pupil has declined by as much as 25 percent since 1995. At the same time, Newtown’s enrollment increases are among some of the highest in the state. As a result, Newtown’s local spending for education over the past five years has increased by nearly 23 percent. And that figure does not even include the $42.6 million spending plan currently being proposed by the Board of Education.

According to the report, more than 100 Connecticut towns have had decreases in state aid since 1995. While the average per-pupil increase in state aid over that period is 7.2 percent, most of the gains have been concentrated on just a handful of communities.

“It’s just a reality. We would have had millions and million per year more if the state had not changed their regulations for funding,” noted Superintendent of Schools John R. Reed last year. “The state will tell you that Newtown is lucky that [the state] implemented its ‘hold harmless’ policy, which took a level and said that funding would not fall below it.”

The problem, Dr Reed said, is the over-reliance on the property tax to fund public education. This is especially true in the wealthier towns. In reality, however, the residents of Connecticut would be footing the bill no matter where the money came from.

“If people want the state to play a greater role, then you would have to raise the income tax,” the schools superintendent said.

Is there a difference whether the state or the town collects the taxes? Doesn’t it even out in the end? CCM thinks not.

“The town only has the property tax. The state has an array of taxes it can draw upon. The largest state tax is the income tax. Most experts say that’s a progressive tax, meaning the burden mostly lands on those who have the most ability to pay. The property tax, on the other hand, is a regressive tax in that it tends to be higher where incomes are lower,” Kevin Maloney explained.

Newtown is one of those towns that has been hit the hardest. It is neither rich – like Greenwich, Darien, and New Canaan – nor poor.

“It can’t get proper funding from the state because it is not that poor. And to the same extent, the individuals do not have the same degree of family incomes as towns in lower Fairfield County,” Mr Maloney explained. “In addition, Newtown does not have the large commercial base to offset the drop-off in state aid.”

With all other sources of revenue depleted, the town has no choice but to turn to its taxpayers to foot most of the bill.

Another dilemma, Dr Reed said, is that people’s disposable incomes are not correlated to the value of their homes. That becomes a major issue when it comes time to pay the tax bill.

The shift in the education burden has not gone unnoticed by First Selectman Herb Rosenthal, who also served for several years on the town’s Board of Education. The state Education Enhancement Act of 1986 pledged significant aid to Connecticut municipalities. However, that money has never reached Newtown. If it had, Mr Rosenthal said, the town would have received an additional $7.5 million in state revenue last year, reducing the tax rate by over four mills.

“We wouldn’t be asking for the mill rate increases we’re looking for if we had the proper educational funding from the state,” Mr Rosenthal has said.

In the past, the first selectman has suggested that the Board of Selectman, Legislative Council, and state legislators write letters to Hartford requesting that state officials do a better job of funding the towns.

This year, Gov John Rowland is taking $25 million out of the Pequot/Mohegan Fund and adding that money along with other money to education formula. The result of that is Newtown is getting $62,000 less in Pequot/Mohegan Funds and nothing more in ECS.