Lawmakers Say Tax Hike Would Have Helped Preserve Spending
Appropriations Committee Co-Chairs Toni Walker and Toni Harp of New Haven said that after seven days of public hearings they crafted the best budget they could, but were confined by Gov. Dannel P. Malloy’s desire not to increase taxes and a contract he negotiated with state employees two years ago.
“The biggest expenditure reflects the SEBAC [State Employees Bargaining Agent Coalition] agreement that was negotiated a few years ago,” Harp said.
The legislature has no ability to cut state employee salaries or benefits negotiated by the governor as part of that contract, which explains why the committee’s hands were partially tied in crafting the spending side of the budget proposal.
Changes Coming from ACA
The two co-chairs also agreed with Malloy’s administration on its decision to cut hospital funding by about $550 million.
Walker said the federal Affordable Care Act will increase the number of insured in the state, which means hospitals will eventually make up the money through private insurance payments.
But even though they agreed to the hospital funding cut, she said they are still looking at ways to help hospitals that really are struggling because they serve a patient base with a higher Medicaid and Medicare mix. She said some of those funds would be shifted back to about 11 of the 29 acute care hospitals, although no details were offered on how that would be accomplished.
Walker said the overall budget goal was to match the governor’s bottom line and in order to do that they needed to maintain his cuts to state hospitals, even if they didn’t necessarily like them.
“I will say this about the hospital cut — I think it’s too much, but I don’t think we could address it . . . without having a conversation about revenue,” Harp said. “Until we have a conversation about revenue in our state, I just don’t see how we address it.”
She said hospital executives’ pay makes it hard for lawmakers who don’t want to necessarily harm their community hospitals, but who also don’t want to cut after-school programs.
“The way that they think about money is different than most of us do,” Harp said of hospital executives.
The comment drew criticism from Republican lawmakers, who held a press conference immediately after Harp and Walker to address the legislature spending and tax proposal.
“I’m not so sure the Democrats or the governor’s office should be talking about executive salaries,” House Minority Leader Lawrence Cafero, R-Norwalk, said. “Not when this governor’s office negotiated a salary with the president of the Board of Regents that was $400,000.”
Sen. Minority Leader John McKinney, R-Fairfield, said they do “massive damage to our hospitals” and they use as their excuse executive compensation.
McKinney said the state pays the chief executive at the University of Connecticut Health Center $930,000 a year, so what private hospitals pay their executives should not play a role in the decision making.
“This issue is not about executive compensation, it is about $550 million worth of cuts to patients and their communities,” said Michele Sharp, communications director for the Connecticut Hospital Association. “Thousands of Connecticut families depend on well-run hospitals not only for their health, but also for their livelihood and economic welfare.”
Scholarships and Priorities
But it wasn’t the hospital cuts that got Republicans worked up. It was smaller line items.
McKinney said he was upset that the Democrats protected the legislative commissions and they cut scholarships for students who attend Connecticut’s private colleges and universities.
“How in God’s name can you say you are representing the people of the state of Connecticut and have your priorities intact when you take scholarships and the opportunity to go to college away from these young men and women?” McKinney asked. “It is abominable that they would protect the government class and the legislative commissions at the expense of young men and women going to college.”
This will lead to deficits in the next biennium because eliminating certain funding from the spending cap only incentivizes further underfunding of the pension plan.
Cafero said Walker and Harp said it themselves — in order to do everything they want to do they have to raise taxes.
“That’s a deep philosophical difference,” Cafero said. “It is painful for them to have to avoid revenues.”
The Finance Committee approved the tax package 31-17 and Appropriations Committees voted 32-17 in favor of the proposal.