Want an early glimpse at your town’s spring budget brawl? Listen to what’s happening in Naugatuck.

Due to a number of staggeringly stupid decisions by its elected overseers and “professional educators,” the borough’s school district is running a deficit of over $2 million in the current fiscal year. That’s nearly 4 percent of the Naugatuck Board of Education’s $56 million budget.

Even in deep-blue Connecticut, where many local governments do their best to emulate Hartford’s fiscal follies, most municipalities don’t have Naugatuck’s money-management problems. But the state’s cities and towns are likely to face similar budget gaps, because subsidies from the state treasury — a major source of revenue — are about to be cut.

So far, municipal pols have enjoyed near-total immunity from the consequences of Connecticut’s badly battered coffers. Washington’s “stimulus” shipped truckloads of dollars to the state, and much of that cash made its way to local governments. In addition, due to the political power of public-employee unions and taxpayer-funded lobbying organizations such as the Connecticut Conference of Municipalities, the dozens of statutory grants that stream into local budgets haven’t been dammed.

But budgeteers at the capitol have a problem: They’ve run out of gimmicks. The federal loot is dwindling. Other one-shot revenue sources are exhausted. Big tax hikes have already been enacted. Rosy economic assumptions are proving to be fallacious. Personnel savings aren’t possible, because the governor signed a cowardly no-layoff deal with state employees that won’t expire until 2011. With few options left, and facing a deficit that Connecticut Comptroller Nancy Wyman says is $549 million, municipal subsidies are finally in decisionmakers’ crosshairs.

Targeting town aid should have been a priority at the start of the Great Recession. At nearly $2.8 billion this fiscal year, grants to local governments comprise 14.6 percent of Connecticut’s general fund. Service on municipalities’ share of the state’s runaway debt — a majority of bonds are devoted to projects like schools and skate parks — adds another $1 billion.

So with real, if belated, cuts imminent, look for there to be a lot more Naugatucks.

For months, the borough has dealt with its school-budget deficit through denial. But the mismatch between revenue and expenditures stubbornly refused to fix itself — instead, it got bigger. Naugatuck’s board of education has proposed a cost-cutting scheme that includes healthcare-plan adjustments, employee furloughs, and a reduction in paid “common planning time” for teachers.

Will unions accept the concessions? The administrator and noncertified “bargaining units” might, but teachers are less likely to acquiesce. When municipal officials throughout the state went begging for wage freezes and higher healthcare-premium shares in 2009, teacher-union bosses responded with extended middle fingers. Labor contracts are legally binding, after all, and besides, if there’s not enough money in the till, the answer is simple: Raise property taxes.

But the unions aren’t entirely to blame for their arrogance. For years, municipal officials have been unwilling to resist Big Education’s demand for more funding. Naugatuck’s a perfect example. In the last decade, its government-school spending has surged by an inflation-adjusted 19.5 percent — despite a drop in student enrollment.
 
The fecklessness of mayors, town councilors, selectmen, and boards of education manifests itself not only as spendthrift silliness, but in a refusal to embrace pro-taxpayer reforms. In the 2009 legislative session, lawmakers considered a tax-credit program that would have enabled corporations to contribute to scholarship funds designed to let kids escape lousy inner-city schools. Parents for Education Reform, a coalition that included the NAACP, Connecticut Christian Schools Association, Connecticut Federation of Catholic School Parents, and Western New England Jewish Forum, lobbied for the bill. Yet despite the pilot measure’s obvious promise, few local-government officials bothered to notice it.

If small reforms aren’t welcome, it’s little wonder that municipal pols also refuse to tackle more sweeping changes. For example, none have the courage to call for repeal of the Teacher Negotiation Act and Municipal Employee Relations Act — the forced-unionism laws passed in the 1960s that put local governments’ spending growth on autopilot.

With a population of just over 30,000 and a median household income in the bottom third of municipalities, it’s probably not accurate to consider Naugatuck a typical Connecticut community. Most of the state’s towns are both smaller and wealthier.

But as the borough stares down a multimillion-dollar deficit, and considers laying off as many as 60 of its teachers, Naugatuck’s financial woes provide a look at things to come. When the state rolls back its largesse to local governments, municipalities will be forced to downsize. It’s about time.

D. Dowd Muska is a writer, commentator and lecturer. His website is www.dowdmuska.com.

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