Time is short, but budget talks are going long [CT Mirror]

CT Mirror
With two weeks until the General Assembly reaches its adjournment deadline of midnight June 3, the principals in state budget negotiations acknowledged Wednesday they are not close to resolving their impasse.

Gov. Dannel P. Malloy refrained from threatening a veto if the legislature stands by tax-and- spending increases that he says are unacceptable, but he did not minimize differences with his fellow Democrats in the legislature.

“I have some real differences with the legislature on how much they want to spend and how much they want to raise,” the governor said in response to reporters’ questions. “I have made those known.”

Meanwhile, the co-chairs of the legislature’s Appropriations Committee have not retreated from an insistence on reversing many of Malloy’s cuts to preserve services affecting tens of thousands of poor and disabled residents.

“We are making progress,” said Sen. Beth Bye, D-West Hartford, co-chair of the Appropriations Committee. “These are difficult issues. Progress is slow.”

Their public remarks were cordial, a tone not always struck since Malloy proposed deep cuts that have provoked opposition from Democrats and Republicans in the legislature.

“I think people are contemplating what I’m saying. I’m certainly contemplating what they’re saying. But we don’t have a deal or a budget put together that I would sign off on,” Malloy said.

The governor and his fellow Democrats in the legislature’s majority are faced with considerable red ink as they struggle to craft a spending plan for the next two fiscal years. According to the legislature’s nonpartisan Office of Fiscal Analysis, state finances would run close to $3 billion in deficit over the coming biennium based on current spending and revenue trends.

Malloy reacted sharply after the legislature’s two budget-writing panels completed work three weeks ago, suggesting that the Democratic majority was unwilling to adopt unpopular spending cuts.

The Appropriations Committee recommended a $40.5 billion two-year plan that restores more than $500 million in cuts — primarily involving social services, health care and higher education. And the Finance, Revenue and Bonding Committee recommended more than $2.4 billion in tax hikes to close the deficit, fund those services, and make a major infusion of new cash to city and town governments.

Malloy has recommended a leaner tax package, with about $360 million in new revenues over two years from the corporation and hospital taxes, and by postponing or canceling about $480 million in previously approved tax cuts.

Lawmakers could craft a new budget without negotiating with the governor — forcing him to either accept or reject it wholesale. And Malloy acknowledged that possibility Wednesday.

Negotiating with the governor “is not an obligation the legislature has to have,” he said. “They can pass their own budget and the like. But I’m hopeful that eventually people will come around, and we’ll get to a point where we recognize that there’s a limit to how much we can spend, and there’s a limit to how much we can tax, and so we’ll see.”

Bye and her Appropriations co-chair, Rep. Toni Walker of New Haven, said no one is walking away from the table.

“It’s taking time, but we are into the process,” Walker said, adding that she and Bye not only must consult with legislative leaders, but also periodically brief their respective caucuses. “It’s difficult to move quickly because there are so many moving parts.”

The governor and legislature also have another fiscal challenge to resolve before the session adjourns on June 3: balancing current state finances. Spending in the 2015-16 fiscal year, which ends June 30, is on pace to close $165 million in deficit, the Malloy administration estimated Wednesday.

This essentially matches the deficit forecast the governor’s staff released one month ago, and represents slightly less than one percent of all general fund spending.

Meanwhile, Senate Minority Leader Len Fasano, R-North Haven, made another appeal Wednesday for bipartisan talks. The GOP says considerable tax hikes and social services cuts could be avoided if the state would seek more than $600 million in new concessions from employee unions.

Union leaders already have said, though, that workers aren’t interested in offering what would amount to their third round of concessions since 2009.

“Legislators have come together in a bipartisan manner on many issues this session,” Fasano said. “It’s time to extend that relationship to the budget debate and collaborate to do what is best for everyone in our state.”