Democratic lawmakers support Lamont’s plan to have cities and towns pay for teachers’ pensions

Democratic lawmakers found common ground with Gov. Ned Lamont Tuesday on a controversial plan to have cities and towns share in the cost of public school teachers’ pensions.

Local leaders immediately criticized the idea, saying it would cost municipalities a combined $73 million a year and would lead to property tax increases across the state.

“We are very disappointed that shifting teachers’ pension costs to towns is still on the table,” said Betsy Gara, executive director of the Connecticut Council of Small Towns, which represents 110 towns with populations of less than 30,000 residents. “Shifting $73 million in pension costs onto the backs of already overburdened homeowners and other property taxpayers will diminish housing values, undermining our state and local economies.”

Kevin Maloney, the chief spokesman for the Connecticut Conference of Municipalities, which represents all cities and towns in the state, said the move regarding the teachers pensions “would be the largest unfunded state mandate in recent memory.”

The teachers’ pension issue came on the same day the Democratic-controlled appropriations committee approved a two-year, $43.3 billion budget that made relatively minor changes to the spending plan Lamont released in February. Lawmakers on the committee said they had planned to include the teachers’ pension piece as part of their proposed budget, but it was accidentally left out based on a miscommunication with staff members.

The spending plan was approved on a party-line vote of 32-17 after a daylong saga of caucuses, press conferences and public statements.

Lamont and the lawmakers maintain towns should pay some costs at a time when the state pays 100 percent of the employer contribution to the teachers’ retirement fund. The wealthiest communities would pay more than 25 percent of their teachers’ pension costs, while cash-stripped cities and towns would pay 5 percent.

Overall spending in the budget adopted Tuesday is a fraction higher than what Lamont proposed. Spending would be about 0.25 percent more that Lamont’s proposal in the first year and less than 0.5 percent more in the second year, lawmakers said.

Democratic lawmakers added more money for local public schools and community colleges and included funds to keep bathrooms at highway rest areas open 24 hours a day. Travelers have criticized the state’s policy, adopted under then-Gov. Dannel P. Malloy, of keeping the rest areas closed at night as a cost-saving move.

The committee also recommended increasing funding beyond Lamont’s proposals for a wide variety of programs, including Meals on Wheels, juvenile justice outreach and workforce development programs.

On education, money for K-12 schools would increase by $42 million in the first year of the budget and $80 million in the second year. Funding for community colleges would increase by $8 million in the first year and $10 million in the second year.

Democrats also rejected Lamont’s plans for an asset test for citizens in the popular Medicare Savings Program. They also approved millions in additional funding for individuals with intellectual and developmental disabilities, along with more grants for substance abuse programs and a new class of state troopers in the next fiscal year.

The Democratic plan would increase spending in the upcoming fiscal year by just under 2 percent from spending in the current fiscal year.

“This is an honest, line-by-line budget that increases local education funding, increases our investments in job training and continues the promises we made the last two years in our bipartisan budget,” said state Sen. Cathy Osten, a Sprague Democrat who co-chairs the appropriations committee and served as one of the chief architects of the Democratic plan.

In a brief interview Tuesday at the Capitol, Lamont said that the small differences in the bottom lines bodes well for upcoming negotiations.

“It sounds like we’ve got something we can work on together,” he said.

Lamont said he was “optimistic” lawmakers would pass a budget before the legislative session ends June 5 as the fiscal plan takes precedence over hundreds of pending bills.

“I think it’s a real priority,” Lamont said. “I think we’re getting closer to the finish line.”

Republicans, who said they were not consulted on the final draft of the 241-page document, criticized the Democratic proposal, and they voted against the plan. They have not released an alternative budget.

Rep. Gail Lavielle of Wilton, the appropriations committee’s ranking House Republican, said the bill contained too much spending, including startup and implementation funding for issues that have not yet been approved by the legislature, including increasing the minimum wage and creating a paid family and medical leave program and a public insurance option for small businesses and families.

Deputy House Republican leader Vincent Candelora of North Branford described the Democratic plan as a “status quo budget” — meaning it is similar to Lamont’s and does not include deeper cuts that many Republicans have advocated.

Senate Republican leader Len Fasano of North Haven blasted the spending plan.

“The Democrats’ proposal is a massive step backward for Connecticut families,” he said. “It burdens families with more taxes as a result of new spending when we are facing a deficit. … At a time when our state needs to get serious about change, this proposal goes back to the old days of gluttonous spending, political handouts and made up savings that are impossible to achieve.”

Gian-Carl Casa, president of the Connecticut Community Nonprofit Alliance, said the plan does not cut any services for community nonprofit groups and also restores funding for housing, the homeless, juvenile justice and mental health grants.

“This proposal shows they recognize community nonprofits provide essential services that should be off the table for budget cuts,” he said. “But we are disappointed that the committee rejected cost-saving proposals to shift expensive state services to quality community programs.”

The recommendations are part of a monthslong process that included a series of public hearings on all aspects of the budget — from courthouses to prisons to UConn.

All recommendations are subject to the final budget deal that must be approved by the full House and Senate before being signed by Lamont.

While the appropriations committee voted Tuesday, the larger drama this week revolves around the tax proposals that are handled separately by the finance committee.

Lamont has offered a large number of changes to the state’s tax laws, including widely expanding the state sales tax without pushing the rate above the current 6.35 percent. That includes eliminating the popular sales tax free week in August.

House Speaker Joe Aresimowicz of Berlin says some members of his caucus have raised concerns about the sales tax expansion. Some Democrats in the legislature were urging Lamont instead to favor a 2 percent surcharge on investment income to raise revenue, but the finance committee voted instead Tuesday to study the issue. Lawmakers, however, note that the idea is still pending in other legislation.

Christopher Keating can be reached at ckeating@courant.com.