State must find way to aid municipalities
By EDITORIAL BOARDMay 08, 2003
Republicans love to talk about trickle-down economics. This economic theory maintains that tax cuts have benefits up and down the economic ladder.
People with more money in their pockets spend it on consumer goods, pumping up the economy and generating economic growth. These retail sales increase sales tax revenues and, as retailers make more money, they then pay more income taxes to the state. Thus, the rising economic tide raises everyone's boat.

The problem with this idea is that the reverse also holds true. That is, a slow economy hurts everyone. When more people are out of work, or earning less, the state receives less money from income tax payments. People also look for ways to reduce expenses in a slow economy, cutting back on purchases like new cars and dinners out. This leads to lower sales taxes and less income for car dealers and restaurateurs, feeding into the negative cycle.

At the federal level, this has led to reduced revenue and less aid to states. There simply isn't the money to go around.

The states, as we can see in Connecticut, are addressing the shortfall in federal funding mainly by cutting back on aid to municipalities, leaving local governments with less state funding while they still have to contend with state-mandated expenses.

In Bridgeport, the problem is worsened by other factors, including the cutbacks in school funding. Bridgeport and every other Connecticut community face the same tough economic times that have hamstrung the state. However, the city has only local property taxpayers to turn to for relief.

The Connecticut Conference of Municipalities (CCM) last week released a list of recommended actions the state could take to ease the financial burdens local governments are facing. They range from extending state grants for mandated clean-water projects beyond their sunset date of 2006, to requiring property owners to reimburse municipalities for the cost of removing personal property belonging to evicted tenants.

None of these would solve the problem, but a few of the suggestions could alter the way cities and towns do business and lead to big savings. For instance, the CCM recommends a two-year moratorium on the prevailing wage mandate, which it estimates increases the cost of every capital building project by as much as 30 percent.

Another suggestion is a prohibition against any new unfunded state mandates, which could save Bridgeport untold millions in the future.

The CCM also has recommended various changes to the union system for police and fire departments, as well as changes to the binding arbitration system that would give community leaders more control over labor agreements.

Some of these recommendations would have far-reaching effects on both municipalities and the state, and we cannot at this time support specific changes. However, we strongly support the need for serious debate regarding the CCM's recommendations. We urge legislators to familiarize themselves with the group's list and either support these changes, or explain why they cannot.

©Bridgeport News 2003

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