CT News Junkie | Democrats, Malloy Look to Redefine Spending Cap

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Democrats, Malloy Look to Redefine Spending Cap

by | Apr 19, 2013 5:30pm
() Comments | Commenting has expired
Posted to: State Budget

The Appropriations Committee approved legislation Friday to alter the state’s spending cap and although the bill required only a simple majority to clear the committee, it would need support from every Democrat in the Senate to become law.

Like Gov. Dannel P. Malloy’s budget proposal, the draft budget approved by the legislature’s spending committee seeks to prevent certain types of state spending from being counted against the spending cap. Otherwise, the proposals would exceed the cap.

The changes, which the governor recommended with his budget package in February, stop counting against the cap any spending for which the state will be reimbursed by the federal government. Payments made on unfunded liabilities for both the state employee and teacher retirement systems also would be excluded.

House Speaker Brendan Sharkey said that the changes are necessary to give the state room to spend money on Medicaid, which will be reimbursed by the federal government after the program is expanded in January under the national healthcare reform law.

“I don’t think that the taxpayers of Connecticut want to see us leaving their dollars in Washington and if we do not make common sense changes to the definition of the spending cap, that’s exactly what we’re going to do,” he said.

At a Friday afternoon press conference, Appropriations Committee Co-Chairwoman Sen. Toni Harp pointed out that the two-year budget proposal her committee approved Friday fell beneath the defined spending cap.

“The overall budget, while slightly higher than the governor proposed, is $193.4 million beneath the redefined spending cap in Fiscal Year 14 and about $100 million under the spending cap in 14,” she said.

But Republican leaders, who held a press conference immediately following Harp’s, said that without changing the cap, Democrats would be exceeding the existing spending cap by nearly $500 million in each year of next biennium.

“I heard my Democratic colleagues indicate that they are under the cap by this, that and the other thing. It is a cap that they want to recreate and redefine,” House Minority Leader Lawrence Cafero said.

Cafero and Senate Minority Leader John McKinney said the proposed spending cap changes were an example of the majority making up its own rules rather than substantial spending cuts.

“That is the arrogance of power. That is the arrogance of one-party rule. If what you want to do doesn’t fit within the rules, change the rules,” Cafero said.

But changes to the state’s expenditure cap, which was initially passed by the legislature in 1991 and added to the constitution by voters a year later, will require a three-fifths majority in both the House and the Senate in order to approve.

To clear the House, the bill would need the support of 90 lawmakers. Democrats currently hold 99 of the chamber’s 151 seats. Sharkey said he has been in communication with members of his caucus and believes the bill will be approved by the chamber.

The bill would need 22 votes to be approved by the Senate, a chamber where Democrats control 22 seats. Adam Joseph, spokesman for Senate President Donald Williams, said there has not been an official headcount on the legislation yet but said it will be part of the discussion moving forward.

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(3) Archived Comments

posted by: Noteworthy | April 19, 2013  5:41pm

This is yet another exhibit of what angers taxpayers. When you violate the rules, just change the rules so you’re not. I’m going to try that next time I’m stopped for speeding. I’m going to go out with a spray can and paint over the 55 and make it 75. Make sense to you Toni Harp?

posted by: Commuter | April 20, 2013  9:05am

The spending cap was supposed to be about fixing our messed up tax structure. Rowland and Rell got around it by declaring budget emergencies. So instead of paying down our liabilities and shifting tax burden onto the income tax, the budget ballooned.

Now money is tight and the accounting rules are tight and we’re moving in the right direction on fiscal policy, we have no alternative.

Eliminating pass-through federal money is an obvious thing to do, especially because it helps bring in more money from the federal government.

And taking the pay down of unfunded liabilities out is strategically very smart, because it frees the state to put unlimited funds, if and when they become available in any given year, to pay those down without hitting the cap. That’s going to be good in terms of tax burden and in terms of bond ratings in the future. Normal debt service is still covered by the cap.

Sorry, Mr. Cafero, Mr. Sharkey is right, this is common sense.

posted by: Christopher55 | April 21, 2013  10:49am

Maybe the ST of CT should do away with the Earned Income Tax Credit.  Stop sending money to people who pay no income tax in the first place.  Might be a way to save a buck or two.