Lawmakers, With No GOP Votes, Approve Budget, Tax Changes [Courant]

December 9, 2015

Hartford Courant

HARTFORD — Democratic lawmakers – with no Republican votes —passed a bill Tuesday that cuts corporate taxes and slices $350 million in spending to balance the state’s $20 billion budget in the current fiscal year.

Although Democrats and Gov. Dannel P. Malloy praised the package as “investing in education and transportation and trying to grow jobs,” as Senate Majority Leader Bob Duff said, Republican Rep. Laura Devlin called it “a big disappointment,” and Senate Minority Leader Len Fasano said about structural budget reforms: “Where’s the courage? Where’s the promises?”

Malloy acknowledged that the budget package is flawed but said it sets the stage for the possibility of more sweeping changes in the 2016 legislative session.
After more than 21/2 hours of debate during the one-day special session at the Capitol, the Senate voted 20-15 on a mostly party-line vote for the changes. Dante Bartolomeo of Meriden was the only Democrat to vote against the bill.

The 75-65 vote in the House was also largely along party lines, with Democrats David Alexander of Enfield and John Hampton of Simsbury crossing party lines to vote no. The measure now goes to Malloy, who negotiated the deal with legislative leaders.

“It makes important changes to our tax code to help make our state more regionally competitive, and makes many cuts that are sustainable beyond this fiscal year. … [T]his is a positive step to improve the state’s business climate and deliver long-term predictability that will allow our families and businesses to thrive,” Malloy said.

The package includes $72 million in line-item cuts in a wide variety of state agencies, as well as an additional $93 million in executive branch cuts to be made by Malloy. In addition, $30 million in cuts will be made in each of the next two years from hospitals.

At the same time, the package includes $10 million in corporate tax cuts in the current fiscal year and $19 million in the following year.

But Republicans said they had hoped the bill would live up to its promise of making significant structural changes to state government.

Devlin, a Fairfield Republican, said, “For eight years, we’ve been in an endless cycle of taxing, spending, deficits, remediate … it goes on and on, and our citizens and businesses have had enough.”

Fasano, of North Haven, said the package included no structural fiscal reforms that would change the fundamental direction of the budget on issues like union contracts and pensions.

“Where are they?” Fasano said of the reforms. “I don’t see them. …There are no structural changes that tell the residents of the state and the businesses of the state that we are going in a different direction.”

House Republican Leader Themis Klarides of Derby said lawmakers held a series of closed-door discussions on a broad array of topics that would have made major changes to the budgeting process, including overhauling the way state employee contracts are approved, adding teeth to a constitutional spending cap and closing the embattled Connecticut Juvenile Training School in Middletown.

None of those items were in the final bill, she said. “The people of this state do not trust us.”

“We stick gum in the hole, and lo and behold, we’re shocked when three or four months go by, and we’re facing a deficit,” Klarides said.

But House Majority Leader Joe Aresimowicz disputed her assessment. “I disagree people don’t trust us,” he said. He cited the advocates for people with disabilities, who thanked lawmakers for largely restoring cuts that would have hurt their clients. Even hospital administrators, who had launched a vigorous campaign in the face of steep cuts, were relieved that some of those reductions were scrapped, Aresimowicz said.

“We hear what happens in Washington, and we’re all frustrated,” Aresimowicz said, referring to congressional gridlock. “Ninety percent of this package was agreed to by both sides of the aisle.” He also said that a special session, with its condensed time frame and lack of opportunity for public hearings, isn’t the right venue for contemplating structural changes.

After the vote, House Speaker Brendan Sharkey released a sharply worded statement criticizing Republicans.

“After demanding to be ‘in the room,’ the Republicans proved today they had no intention of staying until the job was done,” he said. “Although we agreed on many items in the bill Democrats passed today, Republicans walked away because they were unwilling to compromise and insisted on trying to shut down our government until they got their way. As a result, Republicans voted against restoring hospital funding and tax changes to encourage GE and other Connecticut businesses to grow here. After demanding to be given the opportunity to help lead, Republicans showed they were not up to the challenge.”

Malloy characterized the negotiations as “good, serious, bipartisan conversations … While we couldn’t achieve a bipartisan vote, we had a bipartisan process to lead us to the vote tonight.”

Earlier in the day, during the debate in the upper chamber, Senate President Pro Tem Martin Looney of New Haven said that the talks led to “common ground.” A series of proposed cuts, including those for the hospitals, were spread out and made less painful, Looney said.

Republicans complained that the Democratic-written plan also includes numerous “sweeps” and transfers of money into the general fund — a budget-balancing practice they described as a gimmick. The plan calls for transferring $3 million from operating reserves at UConn Health and $2 million each from the Biomedical Research Trust Fund, the School Bus Seat Belt Account and the private occupational school student protection account.

The other sweeps include $1 million from the lottery assessment fund, $400,000 from the Drug Asset Forfeiture Fund and $270,000 in proceeds from the sale of Norwich Hospital.

Republicans charged that the “sweeps” are not actual cuts and are actually budgetary gimmicks in order to prop up the general fund.

“It’s the same speech over and over — just in a different suit,” said Sen. Rob Kane of Watertown, the ranking Republican on the budget-writing appropriations committee. “I got here in 2008, and every year since, we’ve had a deficit. … Maybe we should try something new.”

Kane said that enacting the two largest tax increases in state history in 2011 and 2015 have not stopped the deficits.

“We obviously spend more than we make. We tax too much,” Kane said. “We’re still in deficit. Hello? It’s not working. … When are we going to finally decide that this Band-Aid approach doesn’t work.”

Both Democrats and Republicans said that businesses, including GE, are watching closely to see if lawmakers would push for a business-friendly environment on issues like taxes and transportation.

Sen. Toni Boucher, a Wilton Republican, said she hears from people in diners that the state still has not bounced back as it has after past recessions.
“We are tired of hearing from our Realtors and home builders,” Boucher said on the Senate floor. “You can’t deny the facts. You can’t deny the numbers. You can’t deny the people moving out.”

Sen. Art Linares, a Westbrook Republican, said: “We have a courage deficit. … We’re borrowing money that we can’t afford. … We’re making all the wrong financial decisions at a time when we can’t afford to do so. We have to have pension reform. … We ought to vote on all union contracts. We ought to have a constitutional spending cap that we adhere to.”

The Democratic plan also calls for delaying two months of payments into the Special Transportation Fund for $35.2 million and delaying four months of payments under the Municipal Revenue Sharing Account for $70.4 million, lawmakers said