BERLIN — Stressing he could make no promises, Gov. Chris Sununu told local officials here Friday that he will work with legislative leaders to try to replace some of the state education funding the city has lost.
“I don’t have a magic checkbook,” said Sununu but added, “Hopefully, we can find a way to get this done and still be fiscally responsible."
City officials have publicized Berlin’s fiscal plight, and it was clear that by May 24 the calls for help had reached the governor’s office.
Sununu traveled to Berlin to meet with eight city and school officials, and over lunch heard (and saw) first-hand the impact that losing education stabilization funds has had on the city.
Using a chart, City Manager James Wheeler showed how the annual reductions in aid to property-poor communities, which total $2.1 million over four years, have affected the budget and tax rate.
Berlin was receiving $5.5 million annually. Since 2016, the city’s stabilization aid has been cut by 4 percent each year.
“It's a hole we can’t fill,” Wheeler said.
Sununu said he has spoken to state Senate Finance Committee Chair Lou D’Allesandro about the stabilization funding. The governor said the discussions have focused on gradually restoring the aid to what the communities were receiving. He said they are discussing a three-to-four-year period to get back to 100 percent.
“These details we have yet to work out,” Sununu said, noting that other communities have also felt the impact.
Berlin Mayor Paul Grenier said three to four years was too long for the city to wait. He said Berlin needs to receive another $1.1 million in state funding to avoid laying off two police officers, two firefighters and a public works employee, as well as staffing cuts at the school department.
“We’re desperate today,” City Councilor Lucie Remillard said.
Superintendent of Schools Corinne Cascadden wondered why the Legislature voted in 2015 to phase out the aid without a plan to replace the funding. She questioned the rationale behind the decision.
She told Sununu the school department is closing its only elementary school and moving children into a building that was originally a high school.
Grenier said continued loss of stabilization aid has hampered efforts to consolidate Androscoggin Valley school systems.
According to Sununu, also being discussed with the Senate is returning $40 million in surplus funding to communities through a one-time revenue-sharing appropriation. The money would be split, with $20 million given out each year of the biennium. Sununu said different formulas are being considered — he said his wife suggested basing distribution on the percentage of free and reduced lunch student recipients.
The governor said he is confident the Legislature will approve a revenue-sharing proposal.
Sununu noted city officials also talked about the need for new public works equipment, including two salt trucks and an eight-wheeler.
The governor said the state has set aside $9.3 million for the replacement of municipal vehicles from the almost $30 million the state received as its share of the settlement the U.S. Justice Department negotiated with Volkswagen for skirting emission tests. Sununu said the city should look at that as a potential funding source.
With the new revenue-sharing money and maybe even a piece of the Volkswagen money, that will allow the city to avoid the dire cuts in stabilization aid, Sununu said..
The governor expects the Senate will pass its budget by June 13 and is optimistic there will be a new state budget approved by July 1.
Grenier said it would be nice to get some sense of state funding by June 17, when the council is set to approve the city’s fiscal 2020 budget.
Remillard said housing prices in Berlin have started to increase over the past year and emphasized a tax increase would likely stop that recovery.
Berlin Industrial Development and Park Authority Chair Mike Caron told Sununu the city’s high tax rate makes it tough to attract new businesses. He said new housing starts are rare because taxes on a new home can range around $800-$900 per month.
Sununu said he will get back to city officials by the end of the week with an update.