What Will Malloy Mean for East Hampton?
Dannel P. Malloy took the oath of office this week to become Connecticut’s 88th Governor, and the first Democratic Governor since East Hampton’s own Gov. Bill O’Neill held the post from 1980 to 1990. But with big changes in the Land of Steady Habits, many are curious as to what the former Mayor of Stamford might mean for towns now that he is in charge.
With state officials are struggling to balance a gargantuan $3.4 billion budget deficit, the more than $2.8 billion in town aid might be an appealing budgetary target. Officials at the Connecticut Conference of Municipalities, for example, have expressed “guarded optimism” about the prospects for avoiding cuts in state funds that go to towns.
But other states, like New York, Virginia, and California, have already made significant cuts in K-12 education funding. In East Hampton, Education Cost Sharing grants from the state (and federal government this year with the Stimulus) brought in more than $8 million in revenue for education, comprising approximately 32% of the total education budget and 21% of the town’s overall budget. Reductions in these funds would leave town officials struggling with their own budget crisis.
Allowing municipalities to keep a portion of the sales tax collected locally was an idea suggested by Republican gubernatorial candidate Tom Foley during the 2010 campaign and has been popular among some of Mr. Malloy’s former colleagues, such as New Haven Mayor John DeStefano. Such proposals would give East Hampton the opportunity to diversify its revenue base and be less dependent on state funds. Governor Malloy’s budget chief, Ben Barnes, has expressed an interest in such a proposal but again, with such a huge budget problem at the state level there may not be a great deal of interest in sharing resources with anyone.
The potential implementation of a statewide property tax is another suggested budget solution that would have a major impact on local residents. A bill to enact just such a system was proposed during the previous legislative session and the idea could find new legs in the current one. Property tax revenue is the single largest source of revenue for East Hampton, raising $28 million of the $38 million needed for the town budget. Adding additional weight on top of the local property tax burden would be counterproductive to the hard work that local leaders do each year to hold the line on taxes.
It remains to be seen what the new Governor will mean for East Hampton. Governor Malloy’s approach in dealing with the budget will be the first big test and a key indicator of what the next four years are likely to look like for local residents.
This article was originally published by East Hampton-Portland, CT Patch on Sunday, January 9, 2011.
