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Malloy Makes It Official And Vetoes Budget

by | Sep 28, 2017 11:55am
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Posted to: State Budget, Taxes, State Capitol

HARTFORD, CT — Democratic Gov. Dannel P. Malloy made it official Thursday and vetoed the Republican budget that passed both chambers with the help of eight Democratic legislators. The veto sends the General Assembly — which produced two budgets that analysts said would be billions of dollars out of balance in the out years — back to the drawing board.

Shortly before he met with legislative leaders, Malloy released a veto message outlining his objections to the Republican budget — the plan that he’s been criticizing at press conferences for more than a week.

This budget adopts changes to the state’s pension plans that are both financially and legally unsound,” Malloy wrote in his three-page veto message.

He said it would reverse the progress his administration has made in fully funding the state’s pension obligations. He said it would also make prospective unilateral changes to vested pension benefits, “creating significant risk of constitutional challenge, as well as exposure to potential litigation and hundreds of millions of dollars of liability.”

He said the budget grabs savings today “on the false promises of change a decade from now, a promise that cannot be made because no legislature can unilaterally bind a future legislature.”

Senate Republican President Len Fasano, R-North Haven, has said he believes the decision to assume labor savings from changes made in 2027 is legally and actuarily sound.

Malloy also objected to the changes the Republican budget made to Connecticut’s education system.

“It would do lasting harm to our increasingly competitive K-12 and higher education systems, as well as our efforts to create a highly trained, capable workforce,” Malloy wrote. “The budget falls short of addressing the irrational and unfair Education Cost Sharing formula, and instead exacerbates the inequities of the current system.”

He said the formula Republicans apply would cut education funds to Connecticut’s neediest towns and use it to pay for increases to the wealthiest communities.

“For example, Salisbury would gain 29 percent in total town aid, while Waterbury would lose 5 percent,” Malloy wrote.

Beyond K-12 education, the budget also cuts higher education and eliminates new scholarships for Connecticut’s neediest students.

“Taken together, these cuts to higher education will inevitably lead to drastic tuition increases, fewer seats for in-state students in Connecticut colleges and universities, and a substantial decline in the paying population of students in our community colleges,” Malloy said.

As far as town aid is concerned, Malloy said it doesn’t do what Republicans say it does.

“While proponents of this bill claim that it increases funding to municipalities, it achieves this purported increase only by understating 2017 town aid totals by more than $60 million, failing to account for state reimbursements to municipalities under the car tax cap. In reality, when town aid totals are compared to the actual numbers and all line items are added up, municipalities that need help the most will not get it,” Malloy wrote. “Hartford, for example, would lose $6.8 million at a time when its financial future is in peril, almost certainly forcing it into bankruptcy.”

Municipal organizations like the Connecticut Council of Small Towns have encouraged Malloy to sign the budget because it distributes far more aid to municipalities than a revised executive order which eliminates education funding for 85 communities.

Local elected officials were expected to visit the Capitol later Thursday to ask the governor to sign the Republican budget, but obviously it’s too late for that.

In summation, Malloy said the Republican budget is “unbalanced, unsustainable, and unwise.”

In the same paragraph, Malloy emphasized the need for all parties to come together and negotiate a “realistic, responsible budget that addresses our state’s fiscal issues, distributes education aid equitably, and balances without the use of illusory gimmicks.”

He said failure to reach a deal soon, before Oct. 15, will mean that Connecticut is risking the loss of increased federal reimbursements from a hospital taxing deal to which the Connecticut Hospital Association has agreed.

Malloy has been running the state under an executive order since July 1. What that means is that he is using the funds in the state’s accounts until they run out, but otherwise has no authority to levy taxes to continue funding services until a budget is passed by the General Assembly. Based on that limitation, Malloy has reduced spending drastically, which includes the aforementioned cuts in town aid, etc.

Democratic legislative leaders struggled this year to get the 76 votes in the House and the 18 votes in the Senate they needed to pass a budget, which opened the door for Republicans to surprise even themselves by getting a budget through both chambers.

The Republican budget passed the Senate 21-15 and the House 77-73.

Democrats who have seen their majorities in the legislature shrink over the years have 79 members in the House and 18 in the Senate. Republicans have 72 members in the House and 18 in the Senate.

House Minority Leader Themis Klarides, R-Derby, said the governor’s veto was not unexpected, but it’s “frustrating if not infuriating, not just for the legislators who got it through our chambers here, but more so for the local leaders who for months have pleaded for us to get a budget in place to allow them to provide the core services their constituents expect — educating children, paving roads, and simply keeping town halls open.”

She said by vetoing the budget Malloy “has stamped his seal on this crisis faced by municipalities and people who depend on core state services — he rejected the only plan that made it through the legislature, favoring his roughshod approach that will undoubtedly draw cities and towns deeper into the ‘permanent fiscal crisis’ he and his team in the legislature fueled.”

Klarides and Fasano said they would continue to push for a mathematically difficult veto override that would require all Republican legislators and 29 Democratic legislators in the House and six in the Senate to overturn the governor’s veto.

“By vetoing this budget, the governor’s draconian executive order will remain in effect and create destruction for low and middle income families,” Fasano said. “His executive order cuts core social services, slashes municipal aid, and zeros out funding for public education — a constitutional requirement.”

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