Federation of Connecticut Taxpayer Organizations

HARTFORD � Plans to reverse a cut that would strip $49 million in state aid to towns under Gov. Dannel P. Malloy�s budget haven�t been worked out yet, and those eager for a deal voiced frustration Wednesday.

�I�m not happy that we didn�t have this thing already settled,� Sen. Gary D. LeBeau, D-East Hartford, said. �I�m worried about this being part of a last-minute budget deal.�

Malloy�s proposal calls for eliminating a state refund to towns for property tax-exempt manufacturing machinery and equipment. The governor wants to keep the machinery off the local tax rolls, but not reimburse towns for the lost revenue.

For East Hartford, that would mean losing about $3.6 million. The town, home to Pratt & Whitney, was the largest recipient of the reimbursement this fiscal year.

South Windsor, Stafford, Suffield, Windsor, and Windsor Locks also stand to see an overall decrease in revenue without a change to Malloy�s plan, according to an analysis by the Connecticut Conference of Municipalities. Those losses would come even after counting the new town revenue Malloy proposed, such as a sliver of the sales tax, hotel and entertainment taxes, and property taxes on now-exempt boats and airplanes.

Malloy and his staff say they want to ensure towns like East Hartford aren�t losers in the deal. And lawmakers from East Hartford and other towns that rely on the tax reimbursement have said they�re convinced the issue will be resolved.

But there�s no plan in place yet, LeBeau said late Wednesday. �It was a general assurance,� he said of agreement with Malloy budget officials. �It wasn�t anything specific about how it would be worked out.�

Timothy F. Bannon, Malloy�s chief of staff, said today that many budget specifics are in flux. �I wasn�t aware that anyone had established a deadline for a specific agreement,� he said.

Malloy was expected today to announced changes to his budget, revisions that follow a 17-stop tour of the state in town hall-style meetings.

James Finley, executive director of the Connecticut Conference of Municipalities, also raised concerns over the lack of a solution. �There has not been the progress that we would expect, I think, at this point,� he said.

Finley�s comments came during a news conference Wednesday in which municipal leaders largely praised Malloy�s budget. Malloy kept level the biggest grant to towns � for education � and added the additional revenue.

�We�re still talking to the Finance Committee that has jurisdiction over the implementer bill proposed by the governor,� Finley said. �We have ongoing discussions with the governor�s office at the highest levels.�

Rep. Timothy D. Larson, D-East Hartford, also thought there had been a deal. �This is the first I�ve heard that it�s not going well,� he said Wednesday. Larson predicted last month that the proposal would be changed. His announcement came after a meeting with members of Malloy�s budget staff.

Rep. Patricia M. Widlitz, D-Guilford, is co-chairwoman of the tax-writing Finance, Revenue, and Bonding Committee. Widlitz acknowledged Wednesday that there was no deal in place to continue the funding, but said that doesn�t mean it won�t happen. �We have every intention of holding the towns harmless,� she said.

Widlitz described the budget as �moving pieces.�

�I think we�re getting remarkably close to an agreement,� she said. By �holding towns harmless,� Widlitz said, she meant no town would lose money overall, after balancing any new expected money with the loss in the manufacturing grant.

But for Finley, that�s not enough. Even if the manufacturing towns break even, other towns stand to gain under Malloy�s proposal. That makes manufacturing-heavy towns relative losers. �In my view, that�s not an equitable solution,� Finley said.

LeBeau echoed the sentiment. That plan still would reward towns with retail � effectively punishing those without it. �We�re encouraging retail at the expense of manufacturing,� he said.

The five biggest winners under the governor�s plan are located in Fairfield County: Greenwich, Westport, Fairfield, Malloy�s hometown of Stamford, and Darien. The biggest losers are Middletown, Bloomfield, Bristol, Stratford, and East Hartford.