Gov. Malloy held a press conference on Tuesday, Aug. 1 that did nothing to raise Wilton officials’ already low hopes about getting the usual aid from the state for FY’18. Talking to reporters Malloy reiterated his position about educational aid from the state. “Some districts will have to receive less money so that other districts can receive an appropriate amount of money.”
With CT facing a budget deficit close to $5.1 billion, and no end in sight to legislative battles over a FY’18 budget, Malloy is operating on the FY ’17 budget and governing through executive order, which means his comments don’t bode well for Wilton.
“I had hoped that this would be resolved in the month of August or the first few weeks of September,” Malloy said. “If this is going to drag on, then quite frankly some of those assumptions will have to be adjusted to reflect the constitutional requirement with respect to public education.”
The longer the budget stalemate goes on, the less and less likely it is that Wilton will see any aid at all. Municipalities typically receive the first payment on the Education Cost Sharing grant from the state in the first quarter, but Malloy’s order cuts those ECS funds and diverts them elsewhere.
On the one hand, town officials have long expected that Wilton wouldn’t be seeing anything in the form of the ECS grant–and prepared for that likelihood. Superintendent Kevin Smith says the FY ’18 budget he presented and the town approved was built to cover needs without the $462,941 ECS grant that Wilton would have received.
“We were anticipating this and didn’t budget anything at all from the state for the ECS grant. Our budget speaks for itself,” he says. “We weren’t expecting anything and planned for it.”
Smith lays the fault at the feet of the governor, and is looking to Wilton’s legislators. “We have great advocates in Hartford in Gail [Lavielle], Toni [Boucher] and Tom [O’Dea].”
While officials prepared for the worst and didn’t include any ECS funds in the budget, first selectman Lynne Vanderslice is much more concerned about possibly losing other aid that’s expected.
“We budgeted approximately $1.2 million in municipal aid. If CT continues to operate with no approved FY’18 budget, then the governor will have the authority to potentially divert that aid. The potential loss of that $1.2 million is a bigger risk for the town,” she says.
She’s also worried about the impact the teachers’ pension situation will have, with Malloy proposing to have CT cities and towns share in the rising costs. Vanderslice calls it the biggest risk of all for Wilton, considering the governor’s plan would mean the town would be asked to absorb $4 million.
“Whether that actually happens in FY’18, FY’19 or not, this is going to be an ongoing issue for the governor and the legislature, as the required contribution will grow significantly with each future budget cycle. I worry people think the risk to Wilton disappeared once the legislators voiced opposition to the governor’s plan. The risk hasn’t gone away, and it’s going to get bigger,” she warns.
Vanderslice points to a 2015 study commissioned by the state from the Center for Retirement Research at Boston College, which found that the pension obligation is projected to grow from what it is at the current level of $1.5 billion to $6.2 billion by 2032. Also problematic is that 80% of the current pension contribution is for teachers who have already retired, so any solution will have to be much bigger than simply changing the retirement benefits offered to teachers currently in the workforce.
The state actually has pension crises–plural–with similar problems facing the state employee pension, and the retirement health insurance fund, which is funded is even less.