State Bond Commission To Meet; Malloy To Ask For More Time on Revised Budget
HARTFORD, CT — As he waited for a clearer budget picture, Democratic Gov. Dannel P. Malloy dramatically slowed the amount of money Connecticut borrowed the first half of the year.
Malloy, who initially said he planned to borrow $2.7 billion this calendar year, has only put about $245.7 million on the state credit card. The state Bond Commission is poised to add another $351.7 million at its meeting Friday morning. That would bring the total for the calendar year up to about $597.4 million.
The Bond Commission has scheduled another six meetings, but those could be canceled at any time.
Following a brief photo op in his state Capitol office Wednesday, Malloy reiterated his objection to borrowing to cover this year’s budget deficit.
“Not borrowing,” Malloy said. “Not Rellin’ it.”
The statement was a reference to the decision by former Gov. M. Jodi Rell and the Democrat-controlled legislature in 2009 to use Economic Recovery Notes to help close the enormous two-year, $8 billion deficit at the beginning of the Great Recession. In a letter to legislative leaders earlier this week, Malloy pointed out that the 2009 notes won’t be fully repaid until next year.
Pointing to an April report from Moody’s Investor Services, Malloy has said further borrowing will hurt Connecticut’s credit rating.
Meanwhile, Republican and Democratic legislative leaders were expected to submit their revised budget proposals to Malloy today. Neither of their previous budget proposals included borrowing, but that was before income taxes receipts eroded in April, exposing a $5.1 billion deficit over the next two years.
House Minority Leader Themis Klarides, R-Derby, said Thursday that the budget situation cannot be examined in a vacuum.
“We can’t sit here today and talk about deficit mitigation and tomorrow morning we have a Bond Commission meeting with millions of dollars being bonded and the next Wednesday all sit down and say, ‘where do we go from here?’” Klarides said Thursday. “Part of the reason we’re here is we’re not looking at things in a holistic way.”
Neither Republicans or Democrats have agreed to publicly release the budget document they submit to Malloy. The governor is also not expected to put out a revised budget Friday, but instead is expected to ask for additional time.
Malloy had planned to release his revised budget Friday, but his staff said that because of the intensity of the labor negotiations they are postponing the release of the new budget until Monday.
Office of Policy and Management Secretary Ben Barnes, who is negotiating with the State Employees Bargaining Agent Coalition, has said he will focus on those negotiations even if it means other things fall by the wayside.
Malloy’s February budget proposal assumes $700 million in labor savings in 2018 and $856 million in 2019 in labor savings.
Malloy has already put the unions on notice that he plans to lay off 1,100 in the near future if he can’t reach a deal. That number could increase to 4,200 in order to meet the savings target.
Whatever agreement the Malloy administration makes with the unions to get them close to those dollar amounts will still need to be approved by union leadership before it’s approved by rank-and-file union members.
In order to get the union members to agree to give up health and pension benefits and raises, the administration will have to promise no layoffs and extend the contract.
Klarides said that’s a tough sell and would be a black mark on Malloy’s legacy because it would contradict his criticism of former governors Rell and John G. Rowland for the contracts they signed with the unions.
She said she can’t see her caucus or Malloy agreeing to extend the contract.