An Election Year Budget
Prior to his State of the State address, Gov. Dannel P. Malloy’s Budget Director Ben Barnes outlined some modest fiscal adjustments to the two-year budget.
General fund growth was maintained at about $17.5 billion, or 0 percent over what was adopted last year. The “all funds” budget comes in at about $19.03 billion or about $37.2 million over what was budgeted last June. The growth in spending when all accounts are taken into consideration is about 2.7 percent and it’s $8.1 million under the spending cap.
The legislature’s nonpartisan Office of Fiscal Analysis estimated back in November that if the state maintained current spending and accounted for inflation then the state would head into fiscal year 2016 with an estimated $1.1 billion deficit.
But a recent influx in revenues, including a higher-than-expected yield from a tax amnesty program, gave the Malloy administration some room to breathe. With the surplus estimated at about $506.1 million and a Rainy Day Fund that would increase to $543 million under Malloy’s proposal, the Malloy administration, depending on who you believe, proposed a budget upon which he could run for re-election.
Malloy has not said whether he is running, but some of the Republicans lining up to challenge him at the polls in November made the trek to Hartford for the speech.
The budget Malloy proposed to lawmakers includes about $228.1 million in tax cuts in fiscal year 2015 and another $212.4 million in 2016. Malloy made announcements at press conferences around the state about most of the tax relief he planned to give to taxpayers over the past several weeks.
His proposal includes a $55 tax refund for about 2.7 million Connecticut taxpayers.
On the spending side, Barnes said the administration was able to lower its debt service spending by about $30 million because of lower-than-anticipated borrowing costs.
“There were minor reductions across agencies,” Barnes said. In total, spending was reduced about $16 million, but no programs or services were completely eliminated.
The budget also includes an additional $8 million in PILOT funds, which helps municipalities with the cost of tax exempt property. Last year, Malloy proposed eliminating the PILOT fund and moving into the Education Cost Sharing fund, but local elected officials revolted and it was soon restored.
Malloy will address the General Assembly at noon and his big surprise will be phasing in a universal pre-school program for low-income 3- and 4-year-olds.
The state would use $11.5 million in 2015 to fund 1,020 slots.
There is an estimated unmet need for pre-school slots for more than 4,000 low-income 3- and 4-year-olds in priority, alliance, and competitive school districts, according to budget documents. Malloy would increase the slots to 4,000 by 2019.
Malloy would also include $1.5 million in spending for 28 staffers so that inspections of daycare facilities can occur every year, instead of every three years.
Check back later for more.