The most difficult part of a first selectman’s job just got harder.
The post-recession reality of balancing a budget with less revenue and an increase in services has been complicated by a cloud of uncertainty about the level of critical funding sources from the federal government.
Programs of particular importance to municipalities that may be on Uncle Sam’s chopping block include the Community Development Block Grant (CDBG) and the Low Income Home Energy Assistance Program (LIHEAP). The bearer of this bad news was Congresswoman Rosa DeLauro, D-3, who met Friday with mayors and first selectmen of the third congressional district.
“There are some tough cuts in the president’s budget that will affect us,” DeLauro said. “They [first selectmen and mayors] always have to do more with less, but we’re talking about a whole lot less.”
Before the current fiscal year ends Sept. 30, the federal budget must be trimmed by $60 billion, she said, noting that among the areas proposed to be cut are Tiger II funding, money for the Hartford-Springfield rail line, CDBG and LIHEAP.
Nationwide, CDBG would be cut by $300 million – $3.3 million of which is destined for Connecticut.
The budget has passed the House and is expected to hit the Senate for debate next week. It would then be presented to President Barack Obama for final approval. If it passes as is, Connecticut will lose $117 million, DeLauro said.
“My concern is CDBG,” said East Haven Mayor April Capone. “That program affects so many people … it affects some of our neediest residents.”
Capone’s concern emerged as the central theme among most of her colleagues.
“It’s critical to our community,” Hamden Mayor Scott D. Jackson said of CDBG funds.
“It certainly will have an impact in North Haven,” the town’s first selectman, Michael J. Freda, said. He noted that approximately 9.5 percent of North Haven’s revenue comes from state-related aid, like the CDBG funds, which are filtered down through the governmental hierarchy.
Connecticut’s municipalities are in the midst of crafting their budgets for next year, and the level of uncertainty about certain funding mechanisms is problematic, according to local leaders. Many are building their budgets based on the previous year’s levels.
Characterizing her approach, Capone said, “Be as conservative as you can be and hold your breath.”
Her comment elicited some laughter, but the nature of the current economic climate is far from a joke.
Faced with an increase of $7 million in contractual obligations last year, Naugatuck was forced to trim 50 teachers – representing nearly 1,000 years in institutional knowledge - from its educational workforce. The majority opted for early retirement packages, while between 15 and 20 were cut when certain schools were consolidated.
“That’s a tangible example of what happens in this kind of economic climate,” Naugatuck Mayor Robert A. Mezzo said.
Hamden dealt with a similar situation. Jackson somberly recalled how he delivered the biggest layoff in the town government’s history. He keeps the layoff papers in his desk as a daily reminder of the personal impact his decisions have on residents.
“You have to look at different ways of doing business,” Jackson said.
For East Haven, this meant negotiating a freeze on raises for town employees. Capone said her decision to forego a raise the last three years is one way in which she attempts to lead by example. She’ll forego the raise again next year, she said.
“We all have a responsibility to watch out for the taxpayers,” West Haven Mayor John Picard said.
With the state’s unemployment at 9 percent and people still in jeopardy of losing their homes, many acknowledged that the nation still has not risen from the depths of the recession.
“We haven’t seen a recovery yet in Naugatuck,” Mezzo said.
Historically home to a robust manufacturing industry, Naugatuck has been especially hard hit by the recession and changes in the U.S. economy. “We’re a community used to making things,” Mezzo noted.
That’s why it’s critically important, DeLauro said, that the federal budget strike a balance between spending cuts and investment.
Strategic cuts will be necessary, she said, “but don’t make them on the backs of the taxpayers who can least afford it.”
“We will not rebound if we don’t invest in people and education and worker training,” DeLauro added.
One area where DeLauro sees opportunity to make up for the proposed cuts is to jettison certain subsidies, like a $40 billion package for the oil industry.
“That’s a staggering figure,” Mezzo said.
“In the final analysis it’s going to be a compromise on the budget itself,” said Edward Maum Sheehy, first selectman of Woodbridge.
The prognosis does get better with the 2012 budget. DeLauro said the president’s budget proposal for 2012, for which deliberations have not begun, calls for a gain of $113 million for the Nutmeg State.
The meeting with local leaders is an annual event DeLauro hosts.
“She has been very good for our region,” said Orange First Selectman Jim Zeoli. “Rosa has always proven to be a consensus builder.”
“If there’s any silver lining here … it’s that we now know what we’re facing,” Freda said.