After first issuing and then retracting initial data on August 21, the state Office of Policy and Management (OPM) announced its 2016-17 round of estimated Statutory Formula Grants to municipalities late Friday, August 28, which included a reduction of more than $82,000 for Newtown.

In an apparent signal to step up efforts to find greater efficiencies through regionalizing programs and services to residents, Newtown will be among towns receiving less from the state for the next two fiscal cycles. The town will lose $68,904 from a PILOT or "Payment In Lieu Of Taxes" program, and $13,470 from the Mashantucket/Mohegan Fund.

PILOT grants help offset property tax losses from state-owned operations like the Governor's Horse Guard and Garner Correctional Institution, while the Mashantucket/Mohegan Fund passes through revenues collected by the state from two casinos in Uncasville and Ledyard.

The report shows cuts in the 2016 and 2017 estimated PILOT revenue from $946,060 last year, to $877,156. Newtown's share of the casino grant drops from $952,649 last year, to $939,179 for the next two fiscal cycles.

The latest OPM release states that in fiscal year 2016, the state will provide over $3.2 billion in aid to towns and cities, $2.76 billion in education aid, and $437 million in general aid to municipal general governments. 

Formula aid to municipalities has increased by $419.7 million, or 15%, since 2011, when they received $2.8 billion in state assistance.

The largest grant to municipalities remains the Education Cost Sharing Grant, which provides $2.06 billion to communities and their educational programs. 

Overall state funding for cities and towns — including non-formula items not included in the book, such as state payment for teachers’ retirement costs — tops $4.26 billion.

In addition, there are also over $800 million in new state bond authorizations for municipal school construction, local transportation projects, open space, clean water projects, and various other non-formula programs that are not included in the estimates booklet.

“We are extremely pleased to be able to increase state aid even in the state's challenging fiscal environment this year, and over the last five years,” Ben Barnes, Secretary of the Office of Policy and Management, said in his August 28 release. “State aid holds down property taxes. Municipalities spend more than $13 billion statewide, so state aid pays for roughly one-third of all local services. Without that aid local governments would have to make up the difference or cut services.”

In the previous week's release, Mr Barnes stated that a measure of funding would be held back from grant programs under a $20 million “lapse” in municipal aid that was included in the state budget as passed. A budgeted lapse is an amount programmed in the budget to be saved and not spent, but not targeted at specific programs. 

A similar lapse of $10 million in municipal aid was part of the FY 2015 budget, the August 21 OPM release stated. That lapse reflected an effort by the Municipal Opportunities and Regional Efficiencies (MORE) Commission to create incentives for multi-municipal cooperation that will bring overall government savings. 

The state has funded several programs to help support that type of money-saving cooperation, such as the Intertown Capital Equipment Sharing program ($18.3 million still remaining from $20 million in bond funds authorized in 2011 and 2012) and Regional Planning Grants ($3.4 million). 

The OPM director said in the earlier release that communities can offset any reduction in aid with cost-saving regional initiatives, and that the state and the MORE Commission will work with municipalities to identify promising approaches to do that.

The MORE lapse was important in balancing the state budget and avoiding other types of budget cuts or tax increases. The proposed holdbacks are sensitive to the relative financial needs of each town and city, with smaller hold-backs from more economically distressed communities. 

In the event that the state’s budget is running a sufficient surplus in the Spring of 2016, some or all of the lapsed funds may be released to municipalities which, depending on the success of their regional efforts, could result in an overall gain, the release went on to state.

“State and local governments are partners in funding and delivering services,” Mr Barnes said. “The lapse is less than one-half of one percent of the $4 billion the state provides local governments."

Mr Barnes previously stated that municipalities can save the lapse amounts by achieving regional efficiencies.

"We are asking municipalities to do their share to achieve savings by working together to reduce costs and dependence on the state," Scty Barnes said August 21. "We stand ready to assist them in these efforts, especially in the area of regional cooperation.” 

Newtown has already explored the possibility of regionalizing its emergency dispatch services for police, fire and ambulance calls, but an initial effort to make that move in 2014 was put on hold after numerous emergency services officials and the local police commission expressed concerns about the plan, concerned that public safety might be compromised.

As recently as last week, the Board of Selectmen discussed likely capital funding for a commercial truck washing station that could serve as many as two other local municipalities if the facility is built for and in Newtown. For almost a decade, the Newtown Health District has served the community as well as neighboring Roxbury and Bridgewater, benefiting from some combined efficiencies.

Download the OPM's Estimates of State Formula Aid To Municipalities here.