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Malloy Signs Budget Adjustment

by | May 16, 2018 10:39am () Comments | Commenting has expired | Share

HARTFORD, CT — Democratic Gov. Dannel P. Malloy signed his last budget and he’s not exactly happy about it.

In addition to spending $185.3 million in one-time revenues on on-going programs, the bipartisan budget adjustment creates bigger problems for the next governor and legislature.

“We now face out-year deficits of $1.96 billion in fiscal year 2020, growing nearly $600 million per year thereafter, and we leave the budget reserve fund at $1.16 billion by the end of fiscal year 2019,” Malloy said in a letter Tuesday. “This is significantly below what is needed to meet the challenges of the next recession, which, by many measures, is overdue. Once again, the General Assembly needs to take manageable steps now to rein in out-year deficits.”

The Office of Fiscal Analysis projection shows the next governor and General Assembly will inherit a $4.46 billion deficit over the next two years.

Legislators were quick to point out that Malloy’s budget adjustment released in February also left deficits for the next governor and General Assembly to tackle.

Malloy’s budget left a $844.1 million deficit in 2020 and $1.5 billion deficit in 2021, which is much smaller than the deficits Malloy inherited. Malloy inherited a two-year, $6.72 billion budget deficit when he first took office in 2011.

Aside from the criticism, Malloy also praised legislators for getting the job done on time this year. Last year, they were four months late delivering the governor a budget he could sign.

“Despite these concerns, this budget contains many things to be proud of, it was adopted on time, and I am hopeful that its problems can be addressed through careful executive management as well as further action by the General Assembly in the years ahead,” Malloy said in his letter.

Malloy said the budget has “given our cities and towns, our non-profit providers and others who depend on state services an added degree of certainty and predictability as the new fiscal year approaches. This budget contains a number of things to be proud of, such as shoring up the Special Transportation Fund in the short term, thereby avoiding drastic commuter fare increases and devastating service cuts. This budget also ensures that the next Governor and the next legislature will have a positive balance in the Budget Reserve Fund, which is a sharp contrast to how my Administration arrived in Hartford facing a depleted Rainy Day Fund and a $916 million short-term loan to repay.”

Unlike Malloy’s budget proposal, the bipartisan budget also funded the Medicare Savings Program for the elderly and disabled and it also restored funding for low-income parents on Husky A.

“The recently passed bipartisan budget adjustment invests in our economy, restores funding for core services, protects seniors, rejects cuts to towns and local education, funds transportation projects, and eliminates fare increases and service cuts for buses and trains,” Senate President Martin Looney, D-New Haven, said. “The bipartisan budget accomplishes all of this while not increasing taxes and putting over $1 billion in the state’s Rainy Day Fund.”

He said they need to continue to make progress to balance the needs of the residents with the reality of the revenue structure.

Senate Republican President Len Fasano, R-North Haven, said they appreciate “that the governor signed the second bipartisan budget that again contained a significant number of Republican ideas to correct the fiscal challenges facing our state. If only the governor had not excluded us from the budget writing process in prior years perhaps our ideas could have saved the state from the fiscal problems we are working hard to fix today.”

The budget includes the creation of a seven-member panel to study the Commission on Fiscal Stability and Economic Growth’s proposal concerning the rebalancing of taxes. It also creates a six-member panel to study the commission’s proposal to reform the Teachers Retirement System. Both panels are expected to report back to the legislature Jan. 1, 2019.

The budget, which was passed in the last hour of the 2018 session, also requires the Office of Policy and Management to give private, nonprofit providers a 1 percent cost of living increase. It also allows the office to reduce the rates for any provider who fails to pass the increase along to its employees.

The budget also increases, from $1.6 million to $2.6 million, the amount of funding reserved for CT-N annually beginning in fiscal year 2018.

The funding for the state-run television network comes from the gross receipts tax on cable, satellite, and competitive video service companies. Last year the contractor that was running the network for the Office of Legislative Management for the past 18 years told it they would not be able to continue operations with only $1.6 million.

The Office of Legislative Management has continued to operate the network on its own after hiring back several of the employees. However, the employees hired back were not given any benefits and are not able to receive overtime.

A new contract for the network is expected to be put back out to bid soon.

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