With Connecticut facing a looming $911 million deficit for fiscal year 2017, the General Assembly’s Appropriations Committee passed a budget Wednesday that would close less than two-thirds of the gap.
The budget’s $569 million in cuts will affect every facet of state government, including funding to municipalities and current services, committee co-chairs state Sen. Beth Bye, D-West Hartford, and state Rep. Toni Walker, D-New Haven, told reporters in the state capitol before the committee’s meeting. Though the committee’s budget leaves roughly $340 million in savings unresolved, Bye and Walker said they anticipate that tax revenues will rise later this year and cover the remaining deficit. But before the plan can be adopted, it has to pass through the full General Assembly.
“We know we’re going to impact our residents,” Bye said. “Thousands and thousands came before us and said, ‘Please don’t cut this or that.’ But there are no sacred cows in this budget. There couldn’t be. So everybody took some hits.”
The committee’s budget cuts include a 5.75 percent reduction to the state’s payment in lieu of taxes program, which compensates municipalities for tax-exempt properties. New Haven, with the most tax-exempt properties in the state, would be particularly affected by those cuts. The committee’s budget is notable, however, for not projecting any savings through layoffs of state workers.
Bye and Walker said the process of putting together the committee’s proposed budget was bipartisan, with Democrats sitting alongside Republicans on subcommittees that decided cuts.
Walker noted that the past year has been tumultuous for the state’s budget — the committee’s proposal is the fourth budget the committee has put forth in the last year. The state’s most recent budget revision came at the end of March, when cuts of $220 million to the FY16 budget passed the General Assembly.
Belying Bye’s comments on bipartisanship, the budget only passed the committee by a 33–24 vote, with Republican leaders in Hartford highly critical of the committee’s budget. They said the committee’s failure to fill the entire gap constituted a neglect of duty.
“They failed to do their job,” state Senate Minority Leader Len Fasano ’81, R-North Haven, said. “Just simply failed to do their job. There’s a $900 million deficit, probably $930 to $940, and they didn’t do their job. They only solved $569 million of the $940 million deficit. And that to me is failure on their part.”
State House Minority Leader Themis Klarides, R-Derby, criticized the budget for not addressing the deficit that she said had been agreed upon by Gov. Dannel Malloy, both legislative caucuses and the Office of Policy and Management. Bye and Walker said they have addressed the $570 million gap that Malloy’s February budget closed — despite the dramatic increase in the estimated size of the deficit over the last two months.
Though the current budget deficit results from drastically decreased tax revenues, Bye expressed optimism that revenue projections after the April 18 tax deadline would be up from last year, enough to fill the $300 million gap the committee’s budget left unaddressed.
Republicans criticized that idea with particular scorn. They said tax revenues are going down and any notion otherwise is woefully misguided.
“They talk about this ‘new reality,’ and this budget completely ignores that new reality,” Fasano said, referring to Malloy’s February statements defending cuts. “I don’t know what world they’re in. They must be in a time zone or a warp place. Connecticut revenues are not going up.”
In his February budget, Malloy proposed harsh cuts, justifying them with calls for a “new economic reality.”
In a previous interview with the News, Fasano emphasized the state’s dire tax revenue situation. Gross taxable wages, he said, have declined continuously since 1982 and average pre-tax income is at its lowest point in 30 years.
Fasano is not the only figure to raise concerns about lower revenue projections still to come this year. Comptroller Kevin Lembo wrote in an April 1 letter to Malloy that “further erosion in general fund revenue through the final months of fiscal year 2016” is his greatest concern.
The budget passed the committee by a nine-vote margin, setting up a showdown between Malloy and the General Assembly as he strives to pass his proposals.