Groton's $1.37 Million In State Tax Payments May Be Vulnerable In Upcoming Budget Session

Groton receives $32 million in state aid, $1.3 million of which could be particularly vulnerable during Thursday's special legislative session, a state representative said.

Gov. Dannel P. Malloy called the session last week after the state employee unions failed to ratify a deal that would have created $1.6 billion in savings over two years. Malloy said all options except for additional taxes and the use of surplus funds will be considered to close a projected deficit of $700 million in the coming fiscal year.

“I think it’s over,” said Groton Town Manager Mark Oefinger. “Everything I heard is the governor has made it pretty clear, there’s only going to be one (union) vote, and if the vote fails, the layoffs start. . . Is that posturing? I don’t think it is.”

Oefinger said he spoke last week to State Rep. Edward Moukawsher, D-Groton, and State Sen. Andrew Maynard, whose district includes Groton.

Oefiner said his understanding is that cuts to municipalities would be less in the first year and more in the second, since the state recognizes most communities have already approved their budgets.

Moukawsher said Groton may be at a risk of losing at least one grant. The town had to fight earlier this year to prevent the proposed elimination of a tax relief program on machinery and equipment for some businesses.

The payment in lieu of taxes program allows businesses, including Pfizer and Electric Boat, not to pay property taxes on certain pieces of equipment. The state has paid municipalities a portion of those taxes in the past, so the communities still get the revenue. But the governor's proposed budget initially cut the payment.

Moukawsher said $1.37 million was restored, but it may not hold up now.

"Those grants were already targeted by the governor and I’m afraid those are going to be quite vulnerable,” he said.

He said he believes it’s in everyone’s best interests to minimize cuts to municipalities, but lawmakers are otherwise unlikely to spare some areas and not others.

“The most likely outcome will be an across the board cut if the legislature does it,” he said.

Moukawsher also said he heard the union may vote again, although he does not know when or how such a vote would work.

“I hate to hold out hope for something that appears to be dead, but there is a possibility,” he said.

The governor has authority to cut 5 percent of the budget without legislative approval, and is expected to ask for authority to cut up to 10 percent.

Oefinger said he believes that if municipalities are hit with substantial cuts, they will also be provided relief from some more costly state mandates, such as the minimum budget requirement for education. Of the $32 million in state aid Groton receives, $26 million is education funding.

Oefinger said once Groton knows what its cut will be, the town council will review revenues, then consider where it can save money. Representative Town Meeting would also be involved in the process. Cuts could include a hiring freeze, directive to department heads not to spend money, or layoffs.

Tax bills go out in Groton this week.

“We’re not really in a position to go changing the mill rate (to make up for lost revenues),” Oefinger said. “I think, if anything, we’re going to be cutting expenses in order to meet the new reality.”