1/3 of CT govt spending is untouchable. Guess why?

December 3, 2017

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Special session unlikely to help

(Waterbury Republican-American Editorial)

In late October, Connecticut’s legislature passed a $41.3 billion budget for the 2017-19 biennium, which began July 1. Democratic Gov. Dannel P. Malloy affixed his signature, although he line-item vetoed provisions related to hospital taxation.

This budget is in trouble.

The Malloy administration’s Office of Policy and Management (OPM) projected a $202.8 million fiscal year 2017-18 deficit Nov. 20, and state Comptroller Kevin P. Lembo pegged the hole at $207.8 million Dec. 1.

With Mr. Lembo’s projection, Gov. Malloy is required by state law “to submit a deficit-cutting plan for the legislature’s consideration,” the Republican-American reported. Such a plan is required when the comptroller, state government’s chief financial officer, certifies a deficit that exceeds 1 percent of the General Fund, the largest piece of Connecticut’s budget puzzle.

It seems unlikely that budget adjustments, whether they are made during a special legislative session in the near future, or during the regular session that begins in February, will hold Connecticut in good stead for the long haul.

Connecticut’s latest budget gap was opened by apparent declines in income- and sales-tax revenues, reported Benjamin Barnes, Gov. Malloy’s budget director.

Mr. Lembo concurred, and also referenced red ink in the account state government uses to cover its obligations in the settlement of a long-running legal battle between the State Employees Bargaining Agent Coalition (SEBAC) and former Gov. John G. Rowland.

Meanwhile, legislators of both parties have expressed concern about a budget provision that stands to cost 113,000 Connecticut residents at least some of their Medicaid coverage.

This aspect of the budget was recommended by Gov. Malloy and was intended to save the state nearly $100 million over the biennium, according to the Republican-American.

Also concerning to lawmakers is Gov. Malloy’s proposal to cut $91 million in municipal aid. The budget tasked the governor with finding additional savings over the biennium.

When OPM’s $202.8 million projection became public, Marcia Van Wagner of Moody’s Investors Services asserted mid-year budget fixes would “prove challenging.”

She is correct.

For this, Connecticut residents can thank Gov. Malloy and most legislative Democrats.

In July, Democratic lawmakers – save for Rep. John K. Hampton, of Simsbury – ratified Gov. Malloy’s “concessions” deal with SEBAC.

This deal is a good one for unionized state employees, a notion that is epitomized by a provision that extends to 2027 the master agreement protecting employee benefits.

Personnel costs account for roughly one-third of state spending, yet thanks to the governor’s deal, they largely are untouchable at present.

It is hard to see how action taken by Gov. Malloy and the legislature truly would be effective.

With the 2018 state elections on the horizon, Connecticut voters should remember why this is the case.