Bipartisanship Prevails In Budget Negotiations
The shooting in Newtown weighed heavily on the minds of state lawmakers as they reached a “tentative” agreement late Friday night to close the current fiscal year’s budget deficit.
“If it wasn’t for Newtown I don’t know if we would have reached a compromise,” House Minority Leader Lawrence Cafero, R-Norwalk, said Monday evening after meeting behind closed-doors with rank-and-file lawmakers.
The agreement, which he stressed as “tentative,” is “truly a compromise,” Cafero said.
A compromise that means Democrats and Republicans didn’t get everything they wanted as they attempted to reach a deal on how to close the budget deficit estimated at $365 million to $415 million.
“It relies more heavily on spending cuts than we would have liked,” outgoing Speaker Chris Donovan said as he exited a closed-door caucus in the Legislative Office Building.
But Rep. Toni Walker, D-New Haven, said the spending cuts were “equitably managed” in a way that protects the state’s resources and the safety net.
“We don’t want to push ourselves into a deficiency because of some reductions,” Walker, who co-chairs the Appropriations Committee, said.
She said they worked hard to spare the Departments of Mental Health and Addiction Services and the Social Services from the budget ax, “because we know those areas really need more resources in light of what we’ve seen in the conversation that we’re having now.”
Walker was referring to the shooting in Newtown.
“We’ve gotta manage how we pay for and manage health care,” Walker said. “Mental health is one of the other factors people tend to push aside.”
When Gov. Dannel P. Malloy released his budget framework he proposed cutting about $154 million from Social Services and $9.5 million from the Department of Mental Health and Addition Services. It’s unclear how far either of those cuts were pared back, but Speaker-elect Brendan Sharkey said legislative leaders were able to agree on cutting $252 million from the budget.
The balance will be made up with about $123 million in rescissions by Malloy.
“All the participants in the discussion gave up some in an effort to come to an agreement, which is a good compromise,” Sharkey said.
Sharkey declined to give any details of the deal and lawmakers who attended the caucus had the cuts explained to them, but were not given any documents detailing the reductions.
“I’m duty bound not to give any specifics at this point,” Sharkey said.
Sources have told CTNewsJunkie that the $22 million in revenue changes the Malloy administration proposed have been removed from the package. Also, nonprofit community providers who were worried that they might not receive the previously budgeted 1 percent cost-of-living increase on Jan. 1 are safe, at least for now, according to sources.
What remains is a $122 million cut in Medicaid payments mostly to hospitals. However, it’s a double-edged sword of sorts because the cuts mean the state will forego $58 million in federal reimbursements through the Social Services Department.
Rep. Diana Urban, who chairs the Children’s Committee, said she was relieved that the Care 4 Kids program, which subsidizes childcare, was spared along with school-based health centers. But the Community Investment Act, which helps fund open space, farmland preservation, historic preservation, and affordable housing took a $1 million hit. The Community Investment Act is funded through land record fees.
Longevity payments for non-union employees are on the chopping block as well.
Republicans have long called for the end to the biannual bonuses received by union and non-union employees who have worked for the state for 10 years or more. In October, $6.11 million went to 3,205 non-union employees and political appointees.
Sharkey said he doesn’t know if eliminating the April bonus will have any dollar impact on the deficit mitigation plan the legislature plans to pass on Wednesday, but he said it could be added to the language of the bill.
Cafero said the bonuses need to be stopped now because the non-union state employees will being accruing their April payments shortly. Once the accrual process begins the employees could claim a property right to the bonus, but Sharkey said the legal language is being written to avoid any legal challenges.
Sources said Republicans were also successful in getting Democrats to agree to an income tax fraud investigator who would also focus on the Earned Income Tax Credit.
An estimated 180,000 filers shared a total of $110 million in state income tax refunds through the credit. The credit goes to families who are working but not earning enough to pay income taxes.
Some Republicans believe it’s a form of welfare, while others are supportive. Connecticut’s credit was implemented in 2011 and cannot exceed 30 percent of the federal benefit. The average credit is about $500.
Lawmakers are expected to vote on the agreement this coming Wednesday. Since some will be attending funerals, the start time for the session has been pushed back until later in the afternoon.