HARTFORD, Conn. (AP) — Connecticut’s Democratic governor and legislative leaders announced Friday they reached an agreement on a revised budget, saying it still includes funding for major initiatives such as additional early childhood education slots despite a recent drop in the state’s projected surplus by hundreds of millions of dollars.
But the agreement postpones some planned tax relief, such as the reinstatement of sales tax exemptions on non-prescription drugs and up to $50 in clothing and footwear.
The deal also scraps previously approved plans to allow the state Lottery Corporation to run Keno, a gambling game that has not yet been implemented. While Keno was included last year in the two-year budget as a way to generate more state revenue, many lawmakers have since voiced regret with the decision to allow the game, likely at bars and restaurants.
Democratic leaders, who control the General Assembly, are expected to call the approximate $19 billion budget bill for a vote sometime this weekend. While Gov. Dannel P. Malloy lauded the plan for being balanced and holding spending growth to 1.6 percent, it is questionable how much support it will get from the legislature’s minority Republicans, who have accused Democrats of using gimmicks to balance the budget. This year’s legislative session is scheduled to adjourn at midnight on Wednesday.
“Like any legislative session, this one wasn’t without its surprises and challenges,” Malloy said.
This week he was forced to pull the plug on his proposed $55-per-person tax refund and an additional $100 million pension payment because the state’s projected surplus had collapsed by $461.5 million to $43.4 million — money that will be deposited in the state’s Rainy Day Fund under the Democratic agreement.
Malloy’s administration blames much of the surplus funds drop on personal income tax collections from wealthy people. It said more people than expected claimed investment income in 2012, ahead of the Jan. 1, 2013, expiration of former President George W. Bush’s tax cuts.
The governor, who is seeking a second term this year, said he still believes the state’s economic condition is improving, despite future projected $1 billion state budget deficits. Malloy questioned the accuracy of such projections given the budgetary changes his administration has instituted over the past 3½ years.
“I actually feel pretty good. There will be no tax increase in the future. We will not overspend,” he said. “We have a pretty consistent rate of increase of spending.”
