Connecticut Gov. Malloy Calls for Bipartisan Talks to Close Budget Gap [WSJ]

October 19, 2015

Wall Street Journal

Connecticut Gov. Dannel Malloy on Monday called for bipartisan discussions to close a yawning $120 million budget gap.
The discussions, if successful, would set up a special legislative session to approve the spending cuts to balance the budget.
Mr. Malloy, a Democrat, made $103 million in cuts last month based on new revenue estimates that reflected a decline on Wall Street. He again blamed a weak stock market and stagnating personal incomes for the expected revenue declines.
“I’m as disappointed as anyone that we are facing this fiscal situation again,” Mr. Malloy said.
This shortfall comes four months after the state Legislature passed a two-year, $40.29 billion spending plan in June that raised taxes on the wealthiest individual and on corporations.
In September, the governor’s budget office said it revised its revenue estimates on capital gains taxes due to a poorly performing stock market and proposed closing the $103 million shortfall in part by cutting $63.5 million in Medicaid reimbursements to hospitals.
In addition to hospitals, both Democrats and Republicans criticized those cuts, saying they would hurt health care in Connecticut. Mr. Malloy’s budget office responded by providing another $14.1 million to six smaller hospitals in the state.
The governor’s outreach to include Republicans in the talks is a departure from routine budget negotiations where Republicans, the minority party in the state Legislature, are excluded. Mr. Malloy said, however, he wanted them to provide legitimate alternative spending cuts.
“Come to the table. Bring suggestions,” Mr. Malloy said. “But it’s got to be serious.”
Mr. Malloy said tax increases aren’t under consideration.
Republican Senate Minority Leader Len Fasano and Republican House Minority Leader Themis Klarides said in a joint statement they were glad the governor has decided to include them in the discussions, but faulted the Democrats for excluding them in the past.
“The end result was a one-sided Democrat budget that has completely failed our state,” they said.
State Senate President Martin Looney, a Democrat, applauded Mr. Malloy’s call to include Republicans in budget discussions. He also said Republicans should come to the discussions with a concrete plan to close the budget and not “unrealistic, phantom cuts.”
Democratic Speaker of the House Brendan Sharkey said he supports starting the process by cutting spending across the board by 2.5%. That would save about $125 million, he said.
“This approach would have helped maintain the critical services that thousands of families rely on every day,” Mr. Sharkey said.