A four-month-long budget impasse in Connecticut is starting to have serious ramifications for education funding for local communities.

At issue is a $3.5-billion budget gap that Democrats can't decide how to close.  Until the governor and state lawmakers can agree on a plan, a shortfall in state aid to municipalities is wreaking havoc in towns and cities.

Wall Street Journal:

Dannel Malloy, a Democrat, signed an executive order to keep state operations running. But the order can only provide funding based on the state's current revenue projections. That required cuts to municipal aid in excess of $900 million, most of which fell on education funding.

The Malloy administration has said the solution to avoid painful spending reductions is to pass a budget as soon as possible.

Some of the cuts can be reversed, but that will require a fully enacted budget. Reaching agreement on how to close a two-year $3.5 billion deficit has been difficult.

Republicans lawmakers, along with a few Democrats, passed a budget in September that gave more funding to towns but slashed spending for the University of Connecticut. It also required teachers to pay more for their pensions. Mr. Malloy vetoed that plan last week. The House of Representatives will convene a veto override session Tuesday.

Leo Paul, first selectman of the town of Litchfield, said lawmakers should overturn the governor's veto. The governor's executive order would eliminate state education funding this year for Litchfield, which received $1.5 million from the state last year.

Mr. Paul said the cuts to municipal funding could force his town to raise taxes by up to 8%. "That is unacceptable," he said.

The executive order could reduce school funding for West Hartford by $21 million, or about 7% of the town's budget. Town officials said they have reined in spending to offset potential cuts and want to avoid tapping their reserve fund to keep their AAA bond rating intact.

West Hartford Mayor Shari Cantor said she wants state lawmakers to pass a budget that supports schools across Connecticut.

"We understand the state is in a fiscal crisis," Ms. Cantor said. But "we are going to hurt our young people if we don't invest in them."

Mr. Malloy's executive order keeps education funding flat for the municipalities that have the lowest-performing school districts. That means New Haven will get $154.3 million in education funds from the state, which is the same as last year. But the executive order cuts funding for reimbursements of nontaxable property and other payments by $67 million in New Haven.

As the tax base shrinks in blue states like Illinois and Connecticut, the sharing of scarcity becomes public policy.  And Democrats are unable to decide which of their precious interest groups will feel the ax.

Asking teachers to pay more for their pensions caused the union to howl in protest.  Better that the kids suffer rather than they.  As for the rest of the deficit, it will be a question of moving decimal points around, hoping to stave off the day of reckoning when imaginary cuts and accounting tricks will no longer suffice.

Illinois is at that point now.  The increase in fees and taxes passed after a two-year budget impasse is driving residents out of the state in droves.  Of course, fewer residents means less revenue, so the vicious circle is complete.  Without massive budget and pension reforms, and reducing the power of public unions, the state will eventually become a fiscal basket case.

The blue state model is already dead, as Walter Russell Mead said in 2012.  States like Connecticut and Illinois are only the harbingers of what's to come.