“We can’t afford more tax hikes in this state.” – Sen. Kane (Hartford Courant)

January 24, 2015

Hartford Courant
HARTFORD — Gov. Dannel P. Malloy cut the executive branch budget by another $24.6 million Friday in an attempt to wrestle down the state budget deficit that has ballooned in recent weeks.

With expected cuts by the legislative and judicial branches, the total reductions Friday were $31.5 million.

The reductions were made to more than 25 departments and agencies, ranging from the University of Connecticut and the Connecticut State Colleges & Universities system to the attorney general’s office and the Department of Developmental Services.

“We know these rescissions affect programs that help the people of Connecticut, but we need to control spending to avoid a deficit at year-end,” said Ben Barnes, Malloy’s budget director. “Unfortunately, the governor’s ability to make midyear budget cuts is limited by amount and line item. We will continue to scrutinize state spending and, if necessary, the governor will take additional steps, or propose additional steps to the legislature, to keep this year’s budget in balance. Those decisions will be made as we develop next year’s budget, which will also require some very tough choices.”

The cuts were necessary because the deficit has ballooned to $121 million in the fiscal year that ends June 30. The deficit has increased partly because tax collections are slower than expected, including about $25 million less in gasoline taxes as prices have plummeted recently at the pump.

Under the state’s complicated, two-pronged gasoline tax, one portion of the tax is tied directly to prices at the pump through the gross receipts tax. As a result, the state collects less money in taxes at $2 per gallon than at $4 per gallon. In years when gasoline prices were high, the state received an unexpected windfall in gross receipts taxes. That situation has flipped now as prices have collapsed at the pump.

The largest cuts Friday came from the Department of Developmental Services. The total cuts were more than $7 million, which were the highest of any department in the state. That includes $3.1 million in personnel costs, $3 million for employment opportunities and day services, and $1.6 million for voluntary services.

Other major cuts came from the public education system, where colleges have large budgets and collect millions of dollars in tuition in addition to their subsidies from the state.

The cuts included $2.28 million in operating expenses from the University of Connecticut, $1.5 million from the state’s four regional universities and $1 million from the regional community-technical colleges. The cuts also include $1.35 million from the University of Connecticut Health Center in Farmington.

House Republican leader Themis Klarides told Malloy during a luncheon meeting Friday that the state needs to make moves to cut the budget.

“This deficit we have now is not going in the right direction,” Klarides told Malloy as reporters watched closely in the state Capitol complex cafeteria in Hartford. “We were all hoping that the Christmas retail sales would be higher than they were. We have gas price issues. It’s a good thing and a bad thing. Lower gas prices, people are happy about — but once again, less revenues. So where we are right now seems to be going in the wrong direction.”

Malloy responded that Klarides and Republicans should put their budget-cutting suggestions in writing so that Barnes and his team can analyze the numbers.

“We probably do agree on more things than we disagree,” Malloy told Klarides, echoing one of her previous statements.

“We need to deal with a relatively small problem, and we’re in the same boat with about 25 other states, including states like New Jersey and Wisconsin and others,” Malloy said. “This is not a Democratic issue or a Republican issue. This is an issue of our national economy and the implications it has on an ongoing basis. … We’ll get through this, just as we’ve gotten through the last four years.”

Sen. Rob Kane, a Watertown Republican who serves as the ranking member on the budget-writing appropriations committee, called for bipartisan agreement on the budget cuts.

“Cutting spending is the way to fix our state’s financial crisis. We simply can’t afford more and more tax hikes in this state,” Kane said. “We face multibillion dollar problems in the years ahead. We need to stay focused on what taxpayers’ dollars are spent on, and go line by line in the budget to make cuts. The sooner we confront our state’s spending addiction, the better off Connecticut taxpayers will be in the long run. We have got to work together, as Republicans and Democrats, to do what is best for Connecticut.”

Separate from the short-term budget cuts, the state is facing longer-term issues with projected budget deficits of $1.3 billion in each of the next two fiscal years. Malloy will unveil his proposed budget to close those deficits on Feb. 18 at the Capitol.