Republican Budget Plan Eliminates Democratic Gimmicks, Stays Under Spending Cap, Reduces Deficit

April 17, 2014

Transportation Funding Restored; Tax Relief Accelerated; $55 Rebate Checks, Keno Cut

HARTFORD – Republican lawmakers today unveiled their alternative budget adjustment [PDF] that eliminates Democratic gimmicks, honors the constitutional spending cap, restores transportation funding, accelerates tax relief while providing towns and cities with $26 million in additional aid.

The budget adjustment is an honest, transparent alternative approach that will reduce the projected two-year $2 billion budget deficit. Republicans relied on cuts and the responsible use of some excess revenue to balance the budget and keep spending below the Democrat proposals.

“This is an honest approach that eliminates the ugly gimmicks and ‘techniques’ that have been employed to balance the budget only on paper. Absent the gimmicks, the Democratic budget would be $150 million over the spending cap and out of balance,’’ House Republican Leader Larry Cafero said. “If the proposed Democratic budget is adopted, it will lead to more spending we can’t afford, less money for towns and cities and bigger deficits down the road that will require even more tax increases.’’

Senate Republican Leader John McKinney said, “Reversing the negative impact of years of gimmick-filled tax and spend budgets passed by Democrats won’t happen overnight, but we have to start somewhere. This is a responsible step in that direction. Among other things, the Republican alternative accelerates middle class tax relief, restores critical transportation funding, and keeps promises made to teachers and municipalities, while reducing overall spending so we can begin to address our out-year deficits.”

“I urge Democratic legislators not to dismiss this proposal out of hand. The path that Governor Malloy and their party leaders are taking us on is unsustainable and will only result in further deterioration of our state’s fiscal health.”

Democrats resorted to using $677 million in gimmicks, including delaying payment on $196 million in Economic Recovery notes, raiding off-budget funds such as the Tobacco Health Trust and eliminating the Municipal Revenue account.

They also circumvented the spending cap by either not recognizing liabilities and actual spending, or charging line items to off-budget accounts. These include:

  • Ignoring $51 million in retirees health care costs
  • Ignoring $18 million targeted for magnet schools.
  • Sweeping $96 million from the Municipal Revenue Sharing Account.

Republicans also added $45 million in Critical Program Funding including:

  • restoring $9 million to fully fund the retired teacher’s health care plan
  • a 1 percent cost of living increase for home health aides
  • $15 million to maintain primary care provider rates
  • providing $4.4 million to ease DDS waiting lists for support services
  • Increasing funding for mental health

“In re-setting the state’s priorities, we have scrapped the tricks and blatant gimmickry that have been used in this budget. The Democrats said they would not balance the state budget on the backs of local taxpayers and we are holding them to their word,’’ Cafero added.

The Republican plan also eliminates Gov. Malloy’s plan to give Connecticut residents $55 rebate checks just months before the election, and it halts Keno gambling before it gets started in Connecticut bars and stores.

Some of the state’s excess revenue will be used to properly pay for much needed programs:

  • $346 million to pay off long-term debt, including $196 million to pay off Economic Recovery Notes that Democrats have delayed paying
  • $133 million to accelerate the sales tax exemption on clothing and footwear under $50
  • $60 million to eliminate to the surcharge businesses pay for interest on money borrowed for the state’s unemployment insurance fund
  • $100 million to shore the state employee pension funds.
  • A phased-in exemption of all pensions from the income tax, starting at 5 percent.

The remaining excess funds would be used to pay down debt and go into the state’s Rainy Day Fund under the Republican plan.