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For Immediate Release
CBIA REPORT EXAMINES STATE’S MOST-BURDENSOME MUNICIPAL MANDATES Municipal mandates are a growing problem that must be addressed if Connecticut is to remain a desirable place in which to live and conduct business. That’s according to municipal officials who participated in the Connecticut Business & Industry Association’s study, “How State Mandates Affect Connecticut’s Cities and Towns.” In the report released today, municipal officials said the state needs to take action to reduce negative effects of mandates. Fully funded mandates are acceptable to them, but unfunded and underfunded mandates are not. “There are several hundred municipal mandates in Connecticut,” said Peter Gioia, CBIA economist. “Many of these are partially funded or unfunded and are problematic and unfair because they create financial burdens that cost taxpayers money. Cities and towns have only two ways to pay for these mandates: increase taxes and fees or cut programs and services.” On average, 66 percent of local revenues in Connecticut are generated by local property taxes. In some towns it’s 90 percent or higher, according to 2005 Municipal Revenue and Expenditure Information. Nearly all Connecticut cities and towns have hiked their property tax rates in the past few years, and half of the respondents said the rate hikes were directly related to the costs of unfunded and underfunded state mandates. “Property taxes can be a drag on investment in Connecticut and the state’s economy. More must be done to give municipalities other options to relieve the financial burdens of mandates,” said Gioia. “Local taxpayers, individuals and businesses alike are frustrated by increases in property taxes needed to pay for state mandates.” More than a third (38 percent) of respondents said property tax reform must be addressed in order to improve the fiscal climate in cities and towns. The top three most burdensome mandates cited by respondents have to do with education, prevailing wage and binding arbitration. Other burdensome mandates include revenue collections and revaluation. More than three-quarters (76 percent) of municipal officials interviewed said state education mandates are the most burdensome and have the biggest financial impact on cities and towns. While officials agreed that providing a quality public education is a priority, they also stressed the need for appropriate state funding for these programs. More than half (52 percent) said prevailing wage mandates are one of the most burdensome. Prevailing wage mandates dictate that companies doing business with municipalities pay wages and benefits based on union wage scales developed by the state Department of Labor. Respondents said building costs are substantially higher due to prevailing wage requirements. Most said they are struggling to generate sufficient revenue to maintain or upgrade their facilities, including offices and schools, and are often forced with little choice but to raise property taxes. Forty-eight percent of respondents said binding arbitration is one of the most burdensome mandates, and many said it gives municipal employee and teacher unions an unfair advantage in contract negotiations. “The town can’t continue to grant employees raises in excess of the inflation rate when taxpayers are getting smaller raises or none at all,” said a report participant. Others said the threat of binding arbitration forces municipalities to agree to contracts that they would not otherwise approve. Participants want action taken to reduce the negative effects of mandates:
“It’s clear that officials are struggling to deal with the actions of legislators, and that more must be done in regard to mandate reforms to improve the current fiscal situation in our cities and towns,” said Gioia. Methodology Top administrative and financial officers in more than 21 communities across the state were interviewed for this study. Participants included public servants from every size and type of city and town in Connecticut. In order to ensure a broad representation of perspectives, cities and towns were randomly selected from one of five socioeconomic categories as defined by the Center for Population Research Study, “The Changing Demographics of Connecticut-1990-2000- Part 2: The Five Connecticuts.” ### CBIA is the state’s largest business organization, with 10,000 member companies.
For a copy of CBIA's report: "How State Mandates Affect Connecticut's Cities and Towns," visit www.cbia.com/surveys. For more information contact Nancy Andrews, CBIA media relations manager, at 860-244-1957 or andrewsn@cbia.com. 350 Church
Street · Hartford, CT 06103-1126 · cbia.com/newsroom
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