HARTFORD, Conn. (AP) — The state Senate was expected Monday to pass a proposed $44 billion two-year state budget that Gov. Dannel P. Malloy acknowledged is not perfect but shows Connecticut has “gotten our priorities straight.”
But whether the plan is the cure needed to fix the state’s economic ills was a key point of disagreement.
Republican senators maintained the budget agreement reached by the Democratic governor and the majority Democratic leaders of the General Assembly does not help the state recover from the recession, saying Connecticut continues to lag other states that are seeing economic improvements, including New York and Massachusetts.
“We are going the wrong way. We were going the wrong way two years ago,” said Sen. Jason Welch, R-Bristol, referring to the last budget that relied on higher taxes to help cover a massive budget deficit. “We continue to go the wrong way now despite the many warnings from the many people.”
Malloy told a group of newspaper editors during a Monday conference call that the budget plan continues to make the changes needed to produce savings in state government while not raising new taxes.
“Is this perfect? Not by a longshot. But we are making changes, systemic changes that are producing real savings across the board,” Malloy said. “When you consider where we were two years ago on so many issues and compare that today, there should be no question we are moving in the right direction.”
He pointed to increased funding for economic development and education, including a $1.5 billion investment over 10 years at three UConn campuses to construct science, technology, engineering and math facilities such as research labs. Malloy also touted efforts to fully fund the state’s pension system and exempt clothing and footwear costing less than $50 from the state’s sales tax, beginning June 1, 2015.
“We still have a long way to go, but this budget shows that we’ve gotten our priorities straight and we are determined to keep Connecticut moving forward,” he said.
As in the House of Representatives, Republicans in the Senate picked apart the Democrats’ budget. They criticized it for sweeping money from funds dedicated to programs such as transportation and stem cell research, and for shifting about $6 billion of the $44 billion, in mostly federal Medicaid health care funds for the poor, out from under the constitutional spending cap. After those funds are moved off-budget, the budget is $37.6 billion.
“This clearly is against what the people voted for and what they wanted when they amended our constitution,” said Senate Minority John McKinney, R-Fairfield, referring to the state’s spending cap, enacted after the state passed a personal income tax in 1991.
Some of the more contentious issues from Malloy’s original budget didn’t make it into the final package. For example, the governor’s plan to slash local property taxes on vehicles. Also, state funding for various state grants to cities and towns is now replenished.
“Town leaders are breathing a little easier today because the budget agreement restores key municipal aid programs,” said Betsy Gara, executive director of the Council of Small Towns.
There were also some surprises in the budget, including a move to allow the Connecticut Lottery Corporation to introduce Keno, a lottery type game, in addition to the state lottery. The games would likely be available in restaurants and bars. Under the proposal, the Mashantucket Pequot and Mohegan tribes would each receive up to 12.5 percent of the gross revenues. The state then expects to receive $3.8 million in the first year and $27 million in the second year of the budget.
Malloy said the decision to allow Keno came down to the legislature’s decision to oppose his proposal to auction off electricity services for about 800,000 customers who’ve not selected a power company. Because his budget planned on receiving $80 million from electric companies that wanted to vie for those customers, he said the legislators had to find other revenues to cover the difference.
“We’re not an island here in Connecticut. We’re surrounded by Massachusetts, Rhode Island, New York, all of which have Keno. And ultimately they came to the conclusion that was something that they were willing to do,” Malloy said. “There’s no finer point to that than that. It was seen as an option that they decided to exercise.”
