BETHANY, Conn. — Bethany is small, says its First-Selectman Derrylyn Gorski — so small in fact, that the town of 5,600 relies on its neighbors to get by. Several years ago, Gorski said, Bethany officials realized it could not afford both a street sweeper and a catch basin cleaner (an elephant-like vacuum used to clean storm drains). The solution, Gorski says, was to work with the nearby town of Orange to split the cost of the equipment.
“We maintain the street sweeper, and they have the catch basin cleaner, and we share them” she says.
[ydn-legacy-photo-inline id=”10514″ ]
As towns across Connecticut face budget deficits and struggle to maintain services for their residents, the case in Bethany is indicative of a growing phenomenon across the state. Even New Haven, which already works with neighboring towns on issues such as transportation and education, is “looking at ‘next step’ regional cooperative ventures,” City Hall spokeswoman Jessica Mayorga says. But the need for municipal cooperation — while it could provide new revenue and cost savings — is, to some, threatening the individualistic New England town ideal.
Still, as Hamden state Rep. Brendan Sharkey says, New Haven and Connecticut could do so much more. To that end, he has introduced a series of bills in the General Assembly to make “enhanced municipal cooperation,” or regionalism, a reality.
THE PROPERTY TAX PROBLEM
In a move to promote efficiency, Connecticut rejected regionalism on October 1, 1960. The state eliminated its eight county governments in all but name, instead giving each of its 169 municipalities greater autonomy. But, nearly 50 years later, and by nearly all accounts, Connecticut’s system of independent municipal governments is anything but efficient.
Nearly every town hires its own school superintendent, fire chief and police chief, jobs that traditionally carry salaries of $150,000 or more. Additionally, says Lyle Wray, executive director of the regional planning group Capitol Region Council of Governments, since each town is solely dependent upon property taxes to raise revenue, they compete with one another to expand their total amount of taxable property, what is called a grand list.
“Municipalities are naturally suspicious of each other,” he says. “And the only thing towns are more suspicious of is anything regional.”
Heidi Green, the president of 1000 Friends of Connecticut, an organization involved in drafting these regionalism-related pieces of General Assembly legislation, says that the competition between municipalities is at an all time high due to a property tax structure that rewards town-centric behavior. Under the current system, towns compete for new development to expand their grand lists.
“We are competing more between municipalities than the state does with Massachusetts and New York,” she says. “We need to change the way we think.”
And it is the rural towns such as Bethany, which lack an abundance of local businesses, that are feeling much of the pain. Bethany, for instance, has seen its share of state grant money drop 42 percent since 1998. This drop in funding, Gorski says, must be recouped with property taxes. Municipal governments increasing property taxes puts an ever increasing strain on both the municipal budgets and their taxpayers, he says.
But regional thinking may provide the answer to rising property taxes and expanding municipal budget gaps, says Chris Cooper, a spokesman for Gov. M. Jodi Rell.
“Successfully implemented, regional efforts help to preclude municipal budget increases and bring relief to local property taxpayers,” he says. In short, regionalism can save money.
Ideally, according to Sharkey, these would be achieved by the consolidation of various administrative institutions under one roof to help facilitate cooperation and long-term collaborative planning. But he acknowledges that the priorities for cities can be different.
Cities such as New Haven face a whole different set of regional troubles, says Aldermanic President Carl Goldfield. They tend to be the place where a region’s neediest go for services, he says, yet they are often left to pay for these services alone.
“We are hosting regional institutions like hospitals and homeless shelters, and taking regional solutions to regional problems,” he says. “But when it comes to revenue, we are left to fend for ourselves.”
Goldfield says he would welcome a proposal where other towns in the region made use of New Haven’s infrastructure in exchange for some degree of revenue sharing. But he acknowledged that if the solution were that simple, it would have been implemented years ago.
“This is a complicated problem,” he says. “But don’t get me wrong — I’d welcome any step that moves us towards providing municipalities with sources of revenue besides the property tax.”
THE BENEFITS OF REGIONALISM
Presently, the Connecticut General Assembly is considering a series of bills that would allow towns and cities to develop regional economies while sharing tax revenue. Currently, towns compete for new developments in order to expand their individual grand lists. But under Sharkey’s regionalism plan, municipalities would share the tax revenue from new regional projects with other towns in the region, regardless of where they are actually built. In theory, this would allow municipalities to collaborate for the regional good, rather than compete.
“For instance,” Sharkey explains, “Bethany doesn’t produce a large amount of sales tax, but New Haven and Milford do, so there is an incentive for Bethany to regionalize.”
And for cities like New Haven, says Nicholas Perna, a lecturer of economics at Yale and an advisor to Rell, regionalizing provides an opportunity to address some of the grander municipal inequalities.
“Cities serve needier populations and thus need to provide higher-cost social services,” he says. “Regionalism provides us with the opportunity to balance our neighborhoods.”
Perna says that even though New Haven already benefits from economies of scale — the ability to save money by providing services and purchasing supplies in bulk — in comparison to the smaller neighboring towns, regionalism will allow for even more savings.
“New Haven is big compared to its neighbors,” he says. “But it is still too small to realize the benefits of economies of scale when providing certain services — for instance, special education.”
Indeed, according to the latest population estimates prepared by the State Department of Public Health, New Haven is home to only 22 percent of the South-Central Connecticut region’s population. Perna says this is why the city should pursue more regional programs. For instance, aside from potential cost savings, New Haven would be able to access a number of state grants that require the application of multiple municipalities.
According to the Office of Legislative Research, New Haven could see up to a 10 percent bonus in the amount of money it gets from the State Local Capital Improvement Program, and similar increases to State Road Aid grants.
In return for participating in regionalism programs, New Haven would also be granted the opportunity to charge a 1 percent tax on hotel occupancy on top of the state hotel tax. This money would be distributed on a per capita basis to other towns in the region, with New Haven receiving the largest share.
The regionalism bills also include a provision returning up to one-sixth of 1 percent of the sales and use tax generated in a region to participating towns. The Office of Fiscal Analysis predicts that if every town participated, the state would return as much as $90 million to municipalities, with New Haven receiving as much as $3.1 million — an amount city officials say would go a long way to closing the city’s future budget shortfalls.
When Sharkey first began working on the regionalism bills with a bi-partisan panel of legislators and community groups over a year ago, he says, all the state faced was a property tax crisis. Then the economic crisis hit. But this, he says, has only made the push for regionalism more important.
“We have a double-barreled crisis now,” he says. Connecticut will have an ongoing budget problem, he explains, and not restructuring the government will only prolong the crisis. “Regionalism is one way of restructuring.”
Sharkey says he hopes to make regionalism an appealing choice for municipalities by giving them an alternative source of revenue aside from the property tax: a share of the state sales tax.
“We are providing an incentive for municipalities to band together,” he says. “One-sixth of 1 percent of the sales and use tax will be returned to participating towns. This is shifting the entire tax structure of the state. We are tying to make the incentives big enough to make it that any town that doesn’t want to regionalize is losing out on a significant amount of money”
But Wray cautioned that large incentives could force towns into regionalizing against their will, describing it by modifying a popular aphorism: “If you make a carrot big enough, it looks a lot like a stick.”
THE IDENTITY CRISIS
If anything stands in the way of regionalism, say many involved with the process, it is the culture of individualism in Connecticut’s towns.
“People are loath to give up their town’s independence,” says Goldfield. “We have such a history of each town going at it alone, it is imbued in what Connecticut is about.”
Indeed, says Hamden Mayor Craig Henrici, it is hard for elected officials to help other towns when there is work to be done in their own.
“It is hard for towns and municipal leaders to say ‘we need this because it helps Bethany,’” he says. “People have civic pride in their town, not necessarily their region.”
Judy Gott, the executive director of the South Central Regional Coalition of Governments — which comprises several locations, including New Haven, Hamden and Bethany — agrees. Individual municipalities have pursued regional policies when necessary, she says, without being told.
“By cooperating the way they have over the past 40 years, many things have happened regionally that have been good for the municipalities,” she says. “They don’t need the state to dictate a course of action — they are doing what make sense already.”
Currently, Gott says, many municipalities purchase things like oil, gas and paper goods as a consortium. And, as Mayorga adds, New Haven is taking many of the proposed steps on its own accord.
“We already have excellent cooperation within some areas such as our inter-district magnet schools program and apportionment of transportation program funding,” Mayorga says.
But, counters Green of the 1000 Friends of Connecticut organization, this is not enough. People are already losing their town’s independence due to budget cuts, she says. And Wray dismisses the fear of lost autonomy as “red herrings,” saying the majority of regionalism will take place in areas few people care about.
“Back office IT functions, who cares where those are located?” Wray asks. “When in comes to schools and libraries you tread lightly, but no one would notice if a municipality stored information on a different computer.”
Indeed, Connecticut residents haven’t considered the cost of going at it alone, says Perna.
“People hold on to these intangibles, like wanting direct control over their building department,” he says. “But they don’t now the cost of that, and consequently, they aren’t aware of the potential savings. We have all of these building departments in Connecticut, but they all use the same building codes.”
And in truth, Sharkey says, the current regionalism proposals are entirely voluntary.
“There is nothing in the bills that limits the authority of local governments to do what they want,” he says emphatically. “Municipalities have to want to regionalize.”
New Haven has experienced some of the challenges of regionalism first hand, says Goldfield, noting the controversy surrounding the expansion of Tweed-New Haven Airport.
“We have asked other towns to join us in expanding Tweed airport,” he says, something he argues would be beneficial to the region’s economy. “But shortsightedly, they do not see it as in their interests.”
While quick to point out the benefits of regionalism, Gott says she has some serious concerns with the current version of the bills.
“All of the regionalism bills have flaws in them that will make things tougher for us,” she says. “Regionalism has to be done right.”
And though supportive of the idea, Wray conceded that the current series of bills is incomplete. Promoting coordination between Connecticut’s 169 municipalities, he says, will take time.
“Regionalism is a huge issue that needs a number of years to evolve,” says Wray. “Don’t get me wrong, I think Representative Sharkey is the hero here, but this is very complicated.””
Asked whether Rell is supportive of the current version of bills, Cooper says Rell would withhold judgement until the bill reached her desk.
“Governor Rell’s legislative initiatives clearly evidence her support for regionalism,” he says. “However, given that the General Assembly may amend any bill during the legislative process, Governor Rell’s general policy is not to comment on specific bills prior to having an opportunity to review final language.“
Hero or not, Sharkey maintains it is becoming politically unpalatable for politicians to oppose regionalism since it is “the most serious and comprehensive way to solve the property tax problem in a permanent way.”
The bill has enough votes to make it to Rell’s desk for signature, say several close to the process. But, they say, the longer the budget battle between Rell and the majority Democratic General Assembly continues, the bill’s prospects for approval this year dwindle.
And, whatever the level of political enthusiasm for regionalism, the technicalities of governmental organization have not translated into public interest. Gorski, the Bethany first selectman, says that she has not been asked once about regionalism by her constituents, that people are too busy worrying about their jobs and livelihoods to think about regionalism.
“Government is talking about regionalism,” she says, “but I don’t see any interest among average home owners. They have other things to worry about.”