Critical reviews heard on Malloy’s budget plan [Journal Inquirer]

Article as it appeared in the Journal Inquirer
By Mike Savino Journal Inquirer
Posted: Thursday, February 19, 2015

While Gov. Dannel P. Malloy received plenty of praise for his plan to overhaul the state’s transportation system, portions of his budget, which was released Wednesday, are drawing criticism from lawmakers, business leaders, and advocates for the disabled.

Malloy unveiled a General Fund budget proposal of $18 billion in the 2016 fiscal year, followed by $18.55 billion the following year.

His budget office projected budget deficits of $1.1 billion in each of the next two fiscal years, and the governor has proposed a combination of spending cuts and revenue increases to close that gap.

Cuts suggested

Malloy has recommended $590 million in spending cuts next year and $753 million for fiscal year 2017. He also has proposed changes to the tax code that he projects would generate $914.4 million over the next two years.

The governor acknowledged when presenting his spending plan to the General Assembly that the proposal was filled with “tough choices,” but said such decisions are needed to present a plan that stayed under the spending cap.

He also vowed not to agree to an emergency declaration that would allow the state to exceed the spending cap.

Malloy said his other goals for the budget included maintaining funding for education and municipalities, and to get the sales tax below 6 percent over the next two years.

But some of the cuts Malloy has proposed drew strong criticism, especially those that target social services.

While the departments of Mental Health and Addiction Services, Developmental Services, and Social Services all would see increases to their bottom lines, supporters of those agencies say Malloy’s budget still would call for dramatic cuts in services.

Jennifer Schnieder, spokeswoman for Service Employees International Union Local 1199, said DDS’ budget wouldn’t provide relief for the more than 2,000 families on the waiting list for residential placements.

“We understand Connecticut faces many difficult financial decisions,” Schneider said. “However, today’s proposed budget offers no hope for the over 2,000 individuals with intellectual and developmental disabilities on Connecticut’s waiting list for residential placement services.”

Malloy added $12 million to address cases involving those who will become too old for Department of Children and Families care, but also cut $10.4 million for placements of new high school graduates and those who transfer out of Southbury Training School.

AARP critical

AARP state Advocacy Director Claudio Gualteli criticized Malloy’s proposal to cut off entry into the Connecticut Home Care Program for Elders and to require those already enrolled to pay a higher share.

“The Connecticut Home Care Program is a critical first line of defense that helps keep seniors out of nursing homes and allows them to receive care at home where they want to be,” he said.

He also said a similar effort failed under former Gov. M. Jodi Rell.

Malloy also received criticism from area lawmakers in both parties on those cuts.

“We hammered them yet again,” Sen. Tony Guglielmo, R-Stafford, said of these departments.

He said the state’s increased level of borrowing has led to too much of the budget dedicated to debt service, which can’t be cut.

Rep. David Alexander, D-Enfield, said he thinks the state spends too much money on providing incentives for businesses — an initiative that is bonded.

“I wish I had some of the money we gave in give-aways for human services,” he said.

Officials from the University of Connecticut and the Board of Regents for Higher Education, which oversees the state’s regional universities and community colleges, also said cuts to their budgets would result in difficult decisions.

“We will need to take the time to determine what the specific impacts may be, but managing a reduction of that size will necessitate deep and significant cuts throughout the university,” UConn President Susan Herbst said. “Any cost cutting will be guided by one key principle: protecting teaching quality, research advances, and overall academic excellence.”

Malloy has proposed cutting $8.9 million annually from UConn’s block grant and major initiatives, while the Board of Regents is facing a reduction of $19.6 million.

“While we don’t yet know its full impact, this level of spending reduction will almost certainly require a significant increase in student tuition and changes to how CSCU conducts its operations,” Board of Regents President Gregory Gray said. “All of our efforts will be focused on minimizing the impact of this reduction on students as well as on instructional activities.”

‘We’re not there yet’

Business leaders were pleased to hear Malloy propose an end to the business entity tax, which costs $250, but were critical of other changes to taxes that the governor has recommended.

Malloy has proposed reducing tax credits and other tax loopholes, a term that Connecticut Business & Industry Association President and CEO Joseph Brennan objected to hearing the governor use Wednesday.

Brennan said the legislature has used tax credits to encourage certain business practices, and the state needs to encourage investments to continue to rebuild the economy.

“We want Connecticut to be one of the best in the country to do business — we’re not there yet,” he said. “But we don’t want to do things that slam on the breaks — we want to do things that encourage more economic growth.”

Rep. Timothy Ackert, R-Coventry, said he wanted to hear more from Malloy that would encourage investments in businesses.

“What I did not hear is true economic development proposals coming to help Connecticut get back,” he said, adding he feels the state is not a friendly environment for business.

Union representatives said Malloy’s transportation initiatives would create jobs and help spur the economy.

“Rebuilding our crumbling infrastructure has never been more important,” said Lori Pelletier, executive secretary treasurer for the state’s AFL-CIO chapter. “And with this call for increased investment, we can put thousands of unemployed Connecticut workers back to work to literally rebuild our state and help stimulate our economy.

Lawmakers agreed that the state needs to make a point of addressing infrastructure.

“Those are all things that have to be addressed at some point, and I think it’s a good start,” Rep. Claire Janowski, D-Vernon, said.

During his speech Wednesday, Malloy highlighted train stops in Enfield, Windsor, and Windsor Locks along the New Haven-Hartford-Springfield line, and upgrading the two-mile stretch of Interstate 84 through Hartford, among numerous other projects.

Sen. John A. Kissel, R-Enfield, said he was excited to hear Malloy mention the train stations north of Hartford, as well as his call for continuation of double tracking from Windsor to the Massachusetts border.

“North central Connecticut hasn’t always been recognized,” he said.

But other Republicans criticize Malloy for failing to come up with a long-term plan to fund his transportation overhaul.

Malloy proposed $2.78 billion in bonding over the next five years to begin his “Let’s Go CT” initiative and said he wants a task force to examine other revenue sources.

“To say, ‘This is what I hope happens in the next 50 years but I can only fund it for the next two years’ — nobody expects us to put a budget together that way and run the state,” House Minority Leader Themis Klarides, R-Derby, said.

Senate Minority Leader Leonard Fasano, R-North Haven, said Malloy should use a plan that Republicans announced publicly last week, which they said would free up $1 billion annually after reducing bonding for other projects.

But Office of Policy and Management Secretary Benjamin Barnes fired back Wednesday afternoon by saying Republicans didn’t include any projects in their plan, making it easy to call it balanced.

“I’m frankly shocked that Republicans would put out a proposal, a transportation plan which was funded because it didn’t have anything in it,” he said.