Labor and Public Employees Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5445

Title:

AN ACT CONCERNING MUNICIPAL BUDGET RESERVE BALANCES.

Vote Date:

3/9/2017

Vote Action:

Joint Favorable

PH Date:

2/21/2017

File No.:

SPONSORS OF BILL:

Labor and Public Employees Committee

REASONS FOR BILL:

Municipalities are unable to maintain sufficient general reserve fund balances.

RESPONSE FROM ADMINISTRATION/AGENCY:

Representative Scott A. Storms

Towns having Municipals Reserve Balance funds of 15% or less of their municipalities operating budget should not enter into consideration of a town's ability to pay collective bargaining arbitrations awards. A viable reserve fund is an important indicator of a municipality's good fiscal management and accountability. This fund guards against unexpected and unforeseen emergencies and supports bonding and credit ratings.

NATURE AND SOURCES OF SUPPORT:

Francis R. Pickering, Executive Director, Western Connecticut Council of Governments

Considering municipal reserve fund balances in arbitration or collective bargaining confuses sound financial management for the ability to pay and creates a perverse incentive to spend to keep the balances low. Given the fiscal challenges facing the state and some municipalities as well as the expected cuts in state aid, towns/cities that save to avoid unnecessary borrowing interest costs for capital projects should be rewarded for their sound financial management.

Lori Pelletier, President, Connecticut AFL-CIO

CT AFL-CIO opposes the bill. Enacting legislation will allow municipalities keep their budget reserves below the 15% threshold so they may have an upper hand when it comes to binding arbitration.

NATURE AND SOURCES OF OPPOSITION:

Christopher M. Haley, Union Professional Firefighter

This bill threatens the future of labor as do several other bills being heard by this committee. The state has long embraced the principals of collective bargaining and is now placing them under threat. Workers have sacrificed through negations to help their towns and state leaders meet their budgets. So often, these sacrifices go unnoticed and are forgotten until the next time shortfalls occur and employers are again asked to make confessions. These threats will only serve to continue bolstering fears and force skilled workers to move out of state. Workers did not cause this deficit and balancing it should not be placed on the backs of those workers.

Stacey Zimmerman, SEIU Connecticut State Council,

Representing the largest labor union in the state, Mr. Zimmerman testified this bill would benefit only a tiny percentage of the superrich and not workers. Collective bargaining is the most effective force available to spread the gains of economic growth to working families instead of a tiny few. These rights are essential to creating an upwardly mobile middle class and economic prosperity. Removing health care and pensions from collective bargaining would damage the broader economy. The pension system is an engine for the economy and a statement about our society. State and Municipal employees spend their lives working for us. We should not let them retire with a risk of living in poverty.

Reported by: Marie Knudsen

Date: March 22, 2017