Legislative Leaders, Governor Meet To Discuss Budget Changes [CT News Junkie]

June 22, 2015

Article as it appeared on CTNewsJunkie.com

Democratic legislative leaders met with Gov. Dannel P. Malloy Friday to talk about how they plan to move forward with changes to the two-year, $40.3 billion budget.

Senate President Martin Looney, D-New Haven, said Malloy told him and House Speaker Brendan Sharkey that it’s his intention to sign the budget that passed as long as “these issues” are resolved in the budget implementation language.

The budget hasn’t reached the governor’s desk yet. Once it does he will have 15 days to sign it, veto it, or allow it to become law without his signature.

The General Assembly approved the budget by a small margin on June 3 and Malloy, responding to criticism from the business community, announced plans to change it. Last week, Malloy announced he wanted to restore about $223.5 million by eliminating some of the taxes large corporations objected to and finding an equal amount of spending cuts to get the budget to balance.

Since then nonprofits and human service providers have expressed concerns about what 1.5 percent in across-the-board cuts would mean for the populations they serve.

Malloy told lawmakers that they can give him the power to make those cuts, or they can make them.

The 1.5 percent in spending cuts, according to a draft document provided to CTNewsJunkie Tuesday by the governor’s budget office, show the cuts will fall the heaviest on the departments of Development Services, Mental Health and Addiction Services, Social Services, and state colleges and the University of Connecticut.

Sen. Beth Bye, D-West Hartford, said she’s seen what 1.5 percent in spending cuts would mean. It would mean that on July 1, Malloy would essentially be able to cut 6.5 percent from line items in the budget because he already has the power to rescind up to 5 percent of any line item.

“The legislature should not give up its role to appropriate,” Bye said.

The governor has the authority to cut any line item up to 5 percent, but that authority doesn’t include cutting municipal aid without the legislature’s approval. But the additional rescissionary authority of 1.5 percent could include cuts to municipal aid, Malloy said last week. The draft documents released by Malloy’s budget office show that a 1.5 percent cut could mean the loss of about $3.13 million for municipalities that receive money from the state for tax-exempt properties. That’s just one example of what a cut in municipal spending could look like.

On Friday, Sharkey said the changes Malloy proposed last Friday will “not be the final word.”

“We’re producing an implementer with the governor that will get the votes necessary to pass,” Sharkey said.

He said at the moment there is no plan they can present to rank-and-file lawmakers next Tuesday when they caucus. He said they will provide background on a bunch of options and get feedback from the members. A group of 14 moderate Democrats met behind closed doors Thursday to talk about what changes they want to see made to the budget.

Sharkey said he would try to reach consensus on a final plan next week. There were 11 Democrats in the House who joined Republicans in voting against the budget, which passed after an all-night session on a 73-70 vote.

Looney said they’re going to look at spending cuts and “alternate revenues” to balance the budget, but offered no specifics.

The comment caught the attention of Senate Minority Leader Len Fasano, who was not invited to the meeting.

“To hear that alternative revenue sources were put on the table today, in a closed door meeting between a handful of people, is honestly infuriating,” Fasano said in a statement. “… A back room discussion where a potential new revenue source is offered, and legislative leaders will not even share the idea? When will they tell the public and when will they tell Republicans?”

As he walked briskly out of his state Capitol office, Malloy described the meeting as “fruitful,” but offered no further details.

“I’m on my way to Waterbury. You can all come,” Malloy said.

In Waterbury, Malloy said he didn’t see the “historic changes” in the budget being dramatically altered.

The changes to the property tax structure and the decision to use a portion of the sales tax to fund transportation projects are being called “transformational” and “historic” by those who supported the budget.

“It’s a budget I support in its total,” Malloy said. “But I think it can be made better.”

He said he told legislative leaders he wants to sign the budget, but he needs implementation language that makes a few changes.

However, no matter what changes are made the bottom line will remain the same and that means in two years the budget is expected to be running a deficit again.

According to budget documents, the two-year budget approved by the General Assembly has the state running a deficit again in 2018 and 2019 of $663.9 million and $550.7 million, respectively.