The state’s Democratic leadership released its slate of proposed budget cuts Monday afternoon, unveiling a plan that would bring the budget back into the black.
The state faces a budget deficit of between $350 million and $370 million for fiscal year 2016. The Democrats’ proposal — which includes suspending the state’s clean election program and reducing Medicaid funding — would resolve $350 million of that deficit while protecting mental health and disability services, state Senate President Martin Looney, D-New Haven, said in a statement. The Democrats are the third of the three factions in Hartford to make their proposals public — Gov. Dannel Malloy released the administration’s list of proposed cuts on Thursday and the Republicans followed suit the next day.
The bulk of the Democrats’ proposed cuts falls under the category of “Legislative Reductions” — funding cuts to public services made by the state legislature — which would total just over $105 million. The cuts would also give Malloy authority to find another $89 million in savings across the state budget and would use $35 million from the state’s rainy-day fund to close the budget gap.
“In addressing the projected revenue shortfall, our plan continues to make essential investments in education funding, mental health and developmental disability services and municipal aid,” Looney said.
Among the Democrats’ proposals is the yearlong suspension of the Citizen’s Election Program for the 2016 election cycle, which they say would save the state $11.7 million. Established in 2005 after former Gov. John Rowland resigned following corruption-related charges, the CEP provides full public financing to candidates for statewide office and the General Assembly.
The Democrats would also accept $30 million in Medicaid cuts proposed by Malloy earlier in the fall, despite House Speaker Brendan Sharkey’s, D-Hamden, insistence in a Friday press conference that Democrats’ cuts would “protect those folks that need help the most.” Malloy’s proposed Medicaid cuts, announced in September, drew criticism from the Connecticut Hospital Association.
In a Monday press release, Sharkey contrasted the Democrats’ proposed cuts with those presented by the Malloy administration, which drew attention for their reductions in funding for hospitals, Medicaid and mental health centers.
“Democrats remain committed to reversing most of the governor’s cuts to hospitals and social services, from both a human perspective as well as the need to better recognize our health care industry as an important driver of our economy,” he said.
The Democrats’ cuts bear some resemblance to those proposed by the Republican leadership Friday. Both political parties have proposed establishing an Office of Overtime Oversight to keep overtime costs low. Democrats say limiting overtime costs will save the state $10 million in FY 2016.
But the Democrats will not back the early retirement incentive program that accounts for $80 million in savings in the Republican plan. Sharkey said such a program would create long-term stress on the state’s pension system that would outweigh any short-term savings.
The Democrats say their plan goes beyond merely short-term solutions to the budget gap. Senate Majority Leader Bob Duff, D-Norwalk, said in a statement that the plan would enact changes to the state’s tax structure to benefit Connecticut businesses.
“Our plan takes into account the needs of businesses by making adjustments to our tax structure, helps consumers by repealing the propane tax, makes good on our commitment to improve our transportation system and protects funding for education and municipal aid,” Duff said.
The Democrats’ proposals include the extension of a wide array of tax credits, ranging from credits for new businesses in designated economic growth areas called “Enterprise Zones” to the creation of a property tax credit for businesses that create jobs in urban areas.
Republicans and Democrats have used similar rhetoric in making the case for their cuts, and both parties have been careful to make their proposals distinct from the politically unpopular slate Malloy has advanced in recent months. While Sharkey vowed that the Democrats will seek to protect the least advantaged, House Minority Leader Themis Klarides, R-Derby, said Friday that Republican cuts will avoid “cutting from people who need [help] the most.”
Other similarities between the political parties’ proposals include an emphasis on transportation investment and a prioritization of mental health services. The parties say this transportation investment is necessary to expand the base of high-paying jobs in the state. The rejection of Malloy’s cuts to mental health services will set the stage for continuing budget negotiations in Hartford in the coming weeks.