CCM Legislative Overview: 2014 Outcomes & 2015 Expectations

CCM Legislative Overview: 2014 Outcomes & 2015 Expectations

BUDGET BILL Public Act 14-47 (Effective 07/01/14, or otherwise stipulated) The adopted mid-term budget adjustment is a combined General Fund and Transportation Fund expenditure of $18.8 billion. This equates to an increase of $428 million (2.3%) over the FY 14 budget. Overall, municipal aid is increased by $114.0 million (3.6%) in FY 15 versus FY 14. The budget includes an $81.7 million (3.0%) increase in education funding compared to the current year. Non-education funding is increased by $32.2 million (7.1%).

Billions $25 Total Municipal Aid 50% $20 $17.72 $18.36 $18.31 $19.01 $19.98 $20.24 $18.35 $18.78 45% 40% 35% $15 30% 25% $10 15.6% 15.6% 15.5% 15.0% 14.6% 15.5% 17.4% 17.6% 20% 15% $5 $0 $2.77 $2.86 $2.83 $2.85 $2.91 $3.13 $3.19 $3.31 10% 5% 0% Total State Budget Expenditures (General Fund and Transportation Fund) Municipal Aid Municipal Aid as a % of State Spending

Billions PreK-12 Public Education Grants $25 50% $20 $17.72 $18.36 $18.31 $19.01 $19.98 $20.24 $18.35 $18.78 45% 40% 35% $15 30% 25% $10 20% $5 $0 14.9% 15.0% 13.0% 13.1% 13.2% 12.8% 12.3% 13.2% $2.30 $2.40 $2.41 $2.44 $2.45 $2.68 $2.74 $2.82 15% 10% 5% 0% Total State Budget Expenditures (General Fund and Transportation Fund) PreK-12 Grant Aid Education Aid as a % of State Spending

Millions ECS Grant 12% 10% $182 $200 $180 $160 8% 6% $106 $140 $120 $100 4% $74 $71 $64 $80 $60 2% $40 $20 0% $1 $5 $0 $0 % Change from Previous Year $ Increase from Previous Year

Millions Excess Cost-Student Based Grant $142 $140 $140.0 $139.8 $139.8 $139.8 $139.8 $139.8 $139.8 $138 $136 $134 $132 $130 $129.8 $128 $126 $124

Millions Town Aid Road $70 $60 $60 $60 $50 $40 $30 $30 $30 $30 $30 $30 $30 $20 $10 $0

Millions PILOT: Private College and Hospital Property $400 $350 $300 $250 $200 $226.0 54% $242.9 50% $271.3 $300.4 $324.9 $328.0 $348.1 $356.9 100% 90% 80% 70% 60% 50% $150 $100 43% 38% 36% 35% 33% 35% 40% 30% 20% $50 $0 $122.4 $122.4 $115.4 $115.4 $115.4 $115.4 $115.4 $125.4 10% 0% Municipal Revenue Lost PILOT: Private College & Hospitals % Municipal Reimbursement

Millions LoCIP $35 $30 $30 $30 $30 $30 $30 $30 $30 $30 $25 $20 $15 $10 $5 $0 Source: Adopted FY 15 Midterm State Budget Adjustments; CCM, May 2014 Note: The grant would continue to be bond-funded in FY 15.

Millions MRSA Municipal Projects $60 $50 $40 $30 $56.4 $56.4 $20 $10 $0 FY 14 FY 15 Adopt. Source: Adopted FY 15 Midterm State Budget Adjustments; CCM, May 2014 Note: The grant is bond-funded. This grant must be used for Town Aid Road purposes, unless a municipality receives a waiver from OPM.

Millions Municipal Revenue Sharing Account $14 $12 $10 $8 $6 $12.7 $4 $2 $0 $0.0 FY 14 FY 15 Prop. Source: Adopted FY 15 Midterm State Budget Adjustments; CCM, May 2014 Note: The grant reimburses towns for the revenue that was lost when funding for MRSA was terminated effective June 30, 2013.

Millions Property Tax Relief $1.2 $1.0 $0.8 $0.6 $1.1 $0.4 $0.2 $0.0 $0.0 FY 14 FY 15 Adopt. Source: Adopted FY 15 Midterm State Budget Adjustments; CCM, May 2014 Note: This grant holds municipalities harmless if they are expected to see revenue decreases versus FY 14. It will be distributed to 13 towns and cities.

BUDGET IMPLEMENTER BILL PA 14-217 (Various effective dates) Among other things, Requires the Finance, Revenue and Bonding Committee to convene a panel of experts to conduct a thorough study of the state's local and state tax structure. The panel cannot include state legislators. The Panel's report is due on 1/1/15. The Panel may recommend extending the reporting deadline until 1/1/16. Allows retired federal law enforcement agents and retired out-of-state police officers, who have obtained particular certification, to serve as school security guards. Clarifies language regarding merged regional planning organizations. Authorizes $1.3 million from RPIP to the Capitol Regional Council of Governments (CRCOG) to conduct "demonstration projects" in partnership with the Center for Advanced Technology, and in consultation with CCM. Such projects include various pilot programs, such as Internet streaming for local meetings, an electronic document management system and a voice over IP program.

STATE BOND BILL PA 14-98 (07/01/14, or otherwise stipulated) Creates a new grant program for eligible drinking water projects approved by the Department of Public Health under the Drinking Water State Revolving Fund program and authorizes up to $50 million in bonds in FY 15 for the program. It defines "eligible drinking water projects" as, among other things, water companies (private or municipal) that serve at least 25 people or 15 year-round service connections. Increases state authorization by $22 million, from $15 million to $37 million, for the competitive School Security grant program which reimburses municipalities for improving local school security infrastructure, and expands (a) the type of eligible schools to include RESCs, state charter schools, technical high schools, and private schools, and (b) the type of eligible projects to include real time interoperable communications and multimedia sharing infrastructure. Authorizes up to $105 million over FYs 15 through 24 for the Connecticut Smart Start competitive grant (pre-k) program: $15 million for FY 15 and $10 million for each of FYs 16 through FY 24.

EDUCATION PA 14-38 (05/28/14) UNIFORM REGIONAL SCHOOL CALENDAR Allows local and regional boards of education to delay the implementation of the uniform regional school calendar until the school year beginning July 1, 2017, if such board has an existing contract that does not currently allow the implementation of a uniform regional calendar.

EDUCATION PA 14-39 (05/28/14) ESTABLISHING THE OFFICE OF EARLY CHILDHOOD Among other things, establishes the Office of Early Childhood (OEC) and assumes the responsibility for administering all early childhood programs and services that are currently being administered by the State Department of Education, the Department of Social Services, and the Department of Public Health. It also makes changes to the school readiness program by (1) requiring the OEC to expand the competitive grant for school readiness spaces; (2) creating a new school readiness grant to assist eligible towns to start new school readiness classrooms; and (3) providing spaces to eligible children in school readiness programs that are accredited or seeking accreditation.

EDUCATION PA 14-41 (Effective 07/01/14) SMART START PROGRAM Requires the Office of Early Childhood (OEC), in consultation with the Department of Education (DOE), to design and administer the Connecticut Smart Start competitive grant program to reimburse local and regional boards of education for capital and operating expenses related to establishing or expanding a local preschool programs. Local or regional boards of education may submit applications to OEC and may receive (1) a grant for capital expenses no greater than $75,000 per classroom for costs associated with the renovation of an existing school in order to expand a preschool program; and (2) an annual grant no greater than $5,000 per child. The grant program runs for a period of five years. Applicants may collaborate with other boards of education to offer regional preschool programs.

MUNICIPAL FINANCE PA 14-19 (Various effective dates) MUNICIPAL MANDATES RELIEF Allows (1) municipalities that are scheduled to begin property revaluation for 2013 or 2014 assessment years, the option to delay until the 2015 assessment year the implementation of a scheduled phase in of a completed revaluation; (2) eliminates the requirement that towns and cities pay the DMV to prohibit delinquent taxpayers from registering their motor vehicles; and (3) eliminates the requirement that municipalities annually file a report listing the location and type of existing or proposed cell towers and antennas.

MUNICIPAL FINANCE PA 14-33 (Effective 10/01/14) ASSESSMENT OF HORSES, FARM MACHINERY AND THE TRANSFER OF LAND Among other things, allows municipalities to exempt (a) horses of any value from local property taxes, and (b) farm machinery (except motor vehicles) assessed up to $100,000. It also specifies that exempted transfers of land classified under the 490 Program do not affect the 10-year period used to determine a landowner's liability for the tax if the land is subsequently sold or changes use.

LABOR & EMPLOYMENT PA 14-01 (Effective 07/01/14) MINIMUM WAGE INCREASES Increases the minimum wage to $9.15, effective January 1, 2015; to $9.60, effective January 1, 2016; and $10.10, effective January 1, 2017. PA 14-44 (Effective 07/01/15) ELECTRONIC FILING OF PREVAILING WAGE DOCUMENTS Provides municipalities the option to electronically submit, file or maintain notices and records pertaining to requirements of the state prevailing wage mandate.

2015 Legislative Session Priorities & Expectations

Municipal Finance: Do No Harm Maintaining funding levels both statutorily and non-statutorilyset for municipal grants at least at FY15 levels. Restoring the groundbreaking shared-tax allocations (state sales tax and state real estate conveyance tax) to towns and cities from the Municipal Revenue Sharing Account in order to provide local property tax relief. Increasing funding to fully reimburse municipalities for statemandated property tax exemptions, such as the payments-in-lieuof-taxes programs for colleges and hospitals, state property, lowand moderate- income housing, and other exemptions.

Education Finance Reform Correcting state underfunding of regular education programs by (a) increasing the ECS foundation level to reflect the actual cost educating students. The ECS formula should reflect not only an equitable funding mechanism, but an adequate one as identified in the CCJEF v. Rell lawsuit; (b) increasing both the income and property wealth adjustment factors, from 1.5 to 2.0, and weighing the factors equally; (c) reforming the Minimum Budget Requirement (MBR); and (d) committing to phasing-in full funding of the ECS grant on an expedited schedule. Correcting state underfunding of special education programs by (a) the State eventually taking on 100 percent of special education costs and (b) adopting the federal standards pertaining to the burden of proof for special education services. Meeting the statewide need for school construction and renovation by maintaining the State s commitment to ensure that aging schools are renovated and replaced to meet enrollment needs and higher technology and quality standards.

Mandates Relief Ensure proper legislative oversight regarding draft changes to the General Permit for the Discharge of Stormwater from Small Municipal Separate Storm Sewer Systems (MS4 permit) by requiring (a) legislative approval by the General Assembly prior to the adoption of proposed changes to the current MS4 permit, and (b) the General Assembly to conduct a fiscal analysis of the impact of the proposed permit. Enact a Constitutional amendment or statutory prohibition to prohibit the passage of new or expanded unfunded or underfunded state mandates without a 2/3 vote of both chambers of the General Assembly. Modify the requirements for posting legal notices in newspapers to allow municipalities the ability to publish notice of the availability of a particular document on their website, instead of having to publish the entire document. Modify state-mandated compulsory binding arbitration laws to amend CGS 31-98(a) and 31-107 to require that grievance arbitration and unfair labor practice awards be issued no later than 60 days following the date post-hearing briefs are filed. Amend the State s prevailing wage rate mandate: (a) adjust the thresholds for renovation construction projects from $100,000 to $400,000; (b) adjust the thresholds for new construction projects from $400,000 to $1 million; and (c) index both thresholds for inflation thereafter. Amend the Municipal Employee Retirement System (MERS) to establish an additional retirement plan within MERS, for new hires, that would maintain a defined benefit plan. Such new tier would be modeled after the State s tier III, which currently exists within the State Employee Retirement System. Phase-out the burdensome tax on health insurance premiums by (a) cutting the tax rate by 50% beginning 2016, and by another 25% for 2017, and (b) eliminating the premium tax on municipalities altogether for 2018. The health insurance premium tax on municipalities is 1.75% tax on fully insured municipal premiums.

No New Mandates Myth: Mental-mental proposals have been watered-down the concerns of local officials have been addressed. FACT: False. In fact, each proposal would expand existing benefits that already cover counseling to now include full wage replacement benefits. Myth: The costs would be minimal, an independent analysis by NCCI, claims they would not have a significant fiscal impact. FACT: False. In fact, NCCI does not collect municipal workers compensation data in Connecticut, as their analysis only pertains to the private market and therefore, does not apply. Such proposals would impose a highly subject mandate that could cost up to $1million per claim, depending on the situation. The administrative and legal costs just to manage the claims filed for this new mandate let alone fully fund such benefits would negatively impact towns. Myth: Proposals have just been specific to just diagnoses of PTSD. FACT: False. In fact, union proponents have incorrectly describing the bill as they (SB 56) would not have been specific to just PTSD, and would mandate coverage for a mental or emotional impairment ranging from acute stress disorders, to posttraumatic stress disorders, to longer-term chronic or delayed onset disorders. Myth: SB 56 would be specific to only on-duty employees, and pertains only to during an incident. FACT: False. SB 56 would also cover off-duty employees, and would also pertain to anyone that arrives hours (up to 6) after a crime scene is secured. Myth: The mental-mental mandate is narrow and would not affect all municipalities. FACT: False. It is overly broad, as visually witnessing could be subject to interpretation and maiming could pertain to variety of body parts according to current state statute. Myth: The State would provide financial assistance for administering claims and covering such state mandated benefits. FACT: False. The State has never proposed any assistance for mandating such special benefits. Myth: Injuries from the neck up are ignored. FACT: False. Towns and cities already offer health insurance, disability leave, and Employee Assistance Programs (EAPs) to employees for counseling, therapy, and other services. In addition, local first responders also already have workers compensation benefits for mental stress under certain circumstances, such as the use of deadly force, or witnessing another firefighter s death. UNFUNDED STATE MANDATES

CCM CONNECTICUT S STATEWIDE ASSOCIATION OF TOWNS AND CITIES The Connecticut Conference of Municipalities (CCM) is Connecticut's statewide association of towns and cities. CCM is an inclusionary organization that celebrates the commonalities between, and champions the interests of, urban, suburban and rural communities. CCM represents municipalities at the General Assembly, before the state executive branch and regulatory agencies, and in the courts. CCM provides member towns and cities with a wide array of other services, including management assistance, individualized inquiry service, assistance in municipal labor relations, technical assistance and training, policy development, research and analysis, publications, information programs, and service programs such as workers' compensation, liability-automobile-property insurance, risk management, and energy costcontainment. Federal representation is provided by CCM in conjunction with the National League of Cities. CCM was founded in 1966. CCM is governed by a Board of Directors, elected by the member municipalities, with due consideration given to geographical representation, municipalities of different sizes, and a balance of political parties. Numerous committees of municipal officials participate in the development of CCM policy and programs. CCM has offices in New Haven (the headquarters) and in Hartford. 900 Chapel Street, 9 th Floor New Haven, Connecticut 06510-2807 Telephone (203) 498-3000 Fax (203) 562-6314 E-mail: ccm@ccm-ct.org Web Site: www.ccm-ct.org THE VOICE OF LOCAL GOVERNMENT