Addressing Mischaracterizations about the Republican Budget Proposal

Hartford – Senate Republican President Pro Tempore Len Fasano (R-North Haven) released the following information today in response to statements about the Republican budget proposal.

“Yesterday, multiple mischaracterizations were made about the Republican budget proposal in an attempt by Senate Democrats to distract from their inability to vote on a budget in the Appropriations Committee for the first time in state history. While Democrats have failed to put out a full budget, Republicans have. In the words of the governor’s office, the Republican proposal is ‘an earnest effort to balance our state budget.’ All ideas should be considered thoughtfully by both sides of the aisle as we work towards tackling the dire situation our state is facing, not attacked and mischaracterized right off the bat. In light of these comments, the following clarifies how the Republican budget proposal protects municipal funding and bolsters transportation funding in Connecticut,” said Fasano.

 MUNICIPAL AID

 Falsehood: The Republican budget cuts $340 million in funding to municipalities in first year.

 Truth: The Republican budget does not reduce municipal funding for any town in fiscal year 2018. The Republican budget eliminates MRSA, but we continue to provide needed municipal aid through other enhanced payments to towns (PILOT, LOCIP, new education funding formula, Transition Grants and other grants). The budget eliminates MRSA, a program and a funding stream that is unsustainable, and instead funds municipalities by making policy changes. The budget dedicates more money to education and protects towns from the deep cuts proposed by the governor. Under proposed new policy changes, any reductions that would occur in the second year of the budget are also reduced with the continuation of the new Municipal Transition Grant to ease towns into a new sustainable and predictable municipal and education funding system. In short, this budget provides more stable funding for towns and the majority of towns and cities fare better under this budget than under the governor’s proposal. In addition, in FY 2018, no town receives less state funding than enacted in FY 2017.

The above clarifies that the Republican proposal gives towns $95 million more in total town aid in FY 2018 than they receive in FY 2017, and $167.7 million more in FY 2019 compared to the current year.

Falsehood:  The Republican budget taxes $64 million on car drivers.

 Truth: The Republican budget holds towns and cities harmless for the full scheduled increase in MRSA. The Democrat Appropriations Committee budget actually eliminated the scheduled increase, showing the unsustainability of the system. The Republican budget eliminates the program, but keeps all towns whole in the first year, also provides increased funding to certain towns in the first year, and phases in manageable reductions for some towns based on real formulas over time. If towns that benefit under the Republican plan can afford to keep their mill rates down that is still an option because they are kept whole in total funding.

TRANSPORTATION

Falsehood: The Republican budget cuts funding to transportation and sweeps the STF

Truth: The Republican budget is the only plan that keeps the state’s Special Transportation Fund (STF) solvent and stops it from falling into deficiency.  Under the Republican budget more money is directed into the STF and there is no longer a need to divert .5% of the sales tax to the transportation fund. Instead transportation-related sales tax revenue is moved to the Special Transportation Fund. This allows the state to dedicate more funding to transportation to keep the STF solvent. Without these changes, just relying on the .5% of the sales tax would leave our STF with a deficit in 2020. The Republican budget fixes this impending problem. The budget also implements the “Prioritize Progress” transportation funding plan which dedicates $63 billion to transportation over 30 years without new taxes or tolls. Where the Republican budget puts more money in the Special Transportation Fund and makes it solvent, it is the Democrat Appropriations budget that actually sweeps over $75 million annually from the fund, leaving it with a balance of $0 in fiscal year 2020 – severely jeopardizing our roadways, bridges and public safety.

Below is a breakdown of how Republican proposed changes will create surpluses for the STF. This would require transferring to the STF the sales tax from the sales of motor vehicles at dealerships beginning in FY2018 (currently only revenue from buying outside of dealer goes to STF), the sales tax from car services beginning in FY 2020, and the sales tax from car parts starting in FY 2022. This proposal would stabilize the STF for the foreseeable future as projected by the Office of Fiscal Analysis.   See chart below: