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Committee Increases Governor’s Budget, Comes Close to Spending Cap

by Christine Stuart | Mar 27, 2014 11:58am
(5) Comments | Commenting has expired
Posted to: State Budget, State Capitol

Christine Stuart photo

Rep. Toni Walker and Sen. Beth Bye, co-chairwomen of the Appropriations Committee

(Updated 4:18 p.m.) The Appropriations Committee wants to increase state spending by about $12.3 million more than what Gov. Dannel P. Malloy proposed in February, bringing their budget within $700,000 of the state spending cap.

Malloy’s $19.03 billion budget proposal was about $8.1 million under the spending cap. Only a portion of the $12.3 million in additional spending in the Appropriations Committee’s budget is counted toward the cap, making it possible for the committee’s version of the budget to remain under the limit.

However, Republican lawmakers who were just getting their first look at the budget document Thursday said it’s actually over the spending cap, and Democratic lawmakers used fancy budget gimmicks to get around it.

“In reality, it’s well above that [$700,000],” Sen. Rob Kane, the ranking Republican member of Appropriations, said. “It’s probably $500 million over the spending cap when you talk about all the different funds that have been used to avoid it.”

The spending cap, which was instituted at the same time as the income tax, is calculated by tying increases in state spending to either personal income growth or the rate of inflation. The growth rate allowed this year under the cap was 1.74 percent. The average growth rate over the past 20 years has been 4.6 percent per year.

In order to get around the issue last year, lawmakers changed the rules, making it difficult to compare this year’s budget proposal to previous budgets. Last year, the legislature voted to not count Medicaid spending reimbursed by the federal government toward the bottom line in order to avoid exceeding the spending cap. The new policy was adopted as an alternative to more sweeping spending cap changes proposed by Malloy.

This year, Malloy didn’t propose any changes to the spending cap knowing there was still opposition to it from three Democratic Senators who refused to allow the changes last year.

Republican lawmakers didn’t offer any amendments to the budget during Thursday’s meeting, but they said they hope they will continue to be at the table as the committee negotiates a final budget with the governor’s administration.

Christine Stuart photo Appropriations Co-Chairs Rep. Toni Walker, D-New Haven, and Sen. Beth Bye, D-West Hartford, said that’s a decision that will be left up to Senate President Donald Williams and House Speaker Brendan Sharkey. Republicans have largely been left out of the process when it gets to that level in past years.

“I suspect they won’t invite us into the room because they don’t want a dose of real medicine,” Sen. Minority Leader John McKinney, R-Fairfield, said. “But if they do we’re ready, willing, and able to do that.”

McKinney said Republicans haven’t decided whether they would offer their own alternative budget proposal this year.

Some of how lawmakers have gotten around the spending cap includes shifting how line items are traditionally funded and how certain expenses were delayed. In total, the budget the Appropriations Committee approved Thursday shifts $190 million in operating funds to bonding and delays $196 million in debt payments. It also transferred about $18 million from the special transportation fund to the general fund.

The Appropriations Committee budget also uses about $64 million of the $504 million in surplus funds from this year to help balanced the 2015 budget. Last week, the nonpartisan Office of Fiscal Analysis reported that Malloy’s 2015 budget was running a $69.4 million deficit because it failed to fund retiree healthcare, magnet schools, and a few other items.

Bye said the Appropriations Committee does not decide how surplus funds will be distributed. However, she acknowledged that the decision to use $64 million from 2014 will have an impact on the surplus.

Malloy has said he wanted to use $250 million of the surplus to bolster the Rainy Day Fund, make an additional $100 million payment to the state’s pension fund, and give taxpayers back $155 million through a refund program.

“If you look at the list of carry-fowards, those are important investments . . .  that we’re using current dollars to pay for, rather than not do what we believe are important initiatives,” Bye said.

One of those important initiatives, according to Walker, is money for youth employment. She said it’s a major issue for cities. Another major issue for cities is the cost of after-school care for children. She said that’s why they added money for after-school programming.

“We have people who have been having an additional financial burden of, what do I do with my children at the end of the day?” Walker said. “And if you have children that are not being managed or worked with, they’re going to get into trouble.”

Walker dismissed Republican criticism about participation in developing the budget. She said it wasn’t just a Democratic budget because it included input from Republicans at the subcommittee level.

Bye said she anticipates they will have productive discussions going forward with the Malloy administration about the decision to use 2014 surplus funds to help balance the 2015 budget.

The Appropriations Committee approved the budget 26 to 19 down party lines Thursday afternoon.

The budget adds 443 positions to state government, which is 37 more than Malloy’s budget.

Bye, who is co-chairing the committee for the first time, included an additional $500,000 payment to West Hartford as part of the Education Cost Sharing formula, the grant program which funds K-12 education statewide. The committee increases funding for a revised version of the formula by about $7.6 million.

The budget also provides about $4.4 million to help get developmentally disabled adults off a waiting list for residential placement. As of March, there were 635 individuals waiting, 37 of them were designated emergency placements and 598 were designated priority one. There are 110 individuals with caregivers age 70 or older and 99 individuals with caregivers ages 60 to 69. The funds would support about 100 individuals designated as “priority one” placements on the department’s waiting list.

Parents of developmentally disabled adults told the legislature in February that they are afraid of what will happen to their disabled adult children when they die because they’ve been unable to find them safe places to live.

The committee also included $750,000 for family support grants to serve the families of developmentally disabled adults who don’t currently receive any residential services. Bye has been an advocate for the developmentally disabled and helped form a legislative caucus that seeks to look out for their needs.

The budget also includes $75,000 to conduct a “road diet study” in West Hartford. The study will look to reduce the amount of space for vehicles and possibly increase bike lanes. Bye is an avid bicyclist.

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(5) Comments

posted by: Just another CT resident | March 27, 2014  5:05pm

Christine -
Maybe you can help some us better understand where our state tax dollars go.

Ct has about 3.6 million residents; the states closest in population are Iowa 3.1 million people and Okla with 3.9 million people. Both Okla (at over 16%) and Iowa (at over 12%) have a greater percentage of people below CT’s 10% poverty level. A lot of the age demographics of Ct are comparable to those in Iowa and Okla. Yet despite a greater number of people in total and living below the poverty level, CT’s state budget of $20 billion is almost 3 times the budget of either Iowa and Okla which are about $7 billion. Spending on a per capita basis is almost $6,000 in CT, $2,300 in Iowa and $1,900 in Okla. Quite honestly, it boggles the mind to think that the CT needs to spend 3 times as much as states with comparable populations.

So maybe you can help us better understand why CT need to spend so much.
Just a thought

posted by: Christine Stuart | March 27, 2014  8:57pm

Christine Stuart

Just Another CT Resident,
I’m not going to defend the spending CT does, but CT is unique in two ways from those other states. It does not have county government and all local school construction projects are funded by the state. I think those two may account for a lot of the difference.
Best
Christine

posted by: Noteworthy | March 28, 2014  8:08am

Just Another CT Resident:

There are lots of reasons for Connecticut’s comparative high costs. Iowa and Oklahoma are much more conservative states. People there, even if you are poor, do not believe in lots of government or government programs, or lots of public debt. While these states have a county government, the role it generally plays is to provide services like police and public works in the unincorporated parts of a state, not the cities. But the central staff that runs all those parts is generally small and focused on a very short slate of objectives. Libraries, schools, more intensive police coverage, transportation alternatives and larger jail operations are found in the cities, not the county.

In Connecticut, we have counties in name only. Cities and towns own every square inch and provide all services to every square inch - a big chunk of which is paid for with lots of state government. Consider this: Nearly half the cost of New Haven’s city government, with a proposed general fund budget of $510 million for FY14, is paid for by state government.

posted by: Noteworthy | March 28, 2014  12:53pm

In North Carolina - where county government actually provides more services - they jointly run the schools and provide tax collection services, for instance, they do so much more efficiently. Public debt is by referendum only not dictate; schools were famously combined and updated rather than torn down and rebuilt from scratch. Property taxes on a house valued with an effective value of $159,000 in New Haven will have a tax bill of almost $7000; in NC, it will be $1,800 city and county combined.

posted by: dano860 | March 28, 2014  2:03pm

Pennsylvania uses the county system and provides a great education and State to reside in too. Our system of fiefdoms is choking us. Redundancy is rabid in this State.