More than two months after missing the July 1 deadline to pass a biennial state budget, negotiations between Gov. Dannel Malloy and both Democratic and Republican lawmakers remain at a standstill.
Even after the ratification in late August of a $1.5 billion state-employee concessions deal negotiated by Malloy, the state faces a projected $1.6 billion deficit in fiscal year 2018. Over the next two fiscal years, that number rises to $3.5 billion.
Connecticut is no stranger to deficit mitigation and hard-fought budget negotiations, having grown accustomed to dealing with multibillion-dollar shortfalls over the past decade. Just last year, the state faced a projected $1 billion deficit. But rarely have stalemates over how best to close the fiscal gap dragged on into September. If the impasse continues beyond the week of Sept. 11, Connecticut will have gone longer without a budget than ever before. And if you ask the governor, there’s no end in sight.
“I don’t see that the House is anywhere near passing a budget that I could sign,” Malloy said in a Wednesday interview with the Hartford Courant’s editorial board. “Certainly everything I know about the budget they have deliberated on over the last couple of weeks means that I would not sign … that budget.”
He added that the negotiating parties have made “almost no progress” since January, and placed bipartisan blame squarely on the shoulders of the legislature, which he said has shied away from making the tough decisions necessary to reach an agreement.
For conservative lawmakers, though, Malloy is as much at fault as any. In an interview with the News, Senate Republican President pro tempore Len Fasano ’81 applauded the governor for being “firm” and “direct” but rejected the notion that blame lies solely with the legislature. Malloy has tried to cast himself as a bystander when in reality he is chiefly responsible for the budgetary debacle, Fasano added.
State Rep. Dave Yaccarino, R-North Haven, agreed, saying it is Malloy, not the legislature, who has failed to make key decisions.
“The governor made a comment about Senator Fasano, ‘you want your cake and you want to eat it, too,’ but he wants his cake and he wants to eat it too,” Yaccarino said. “He won’t sign a Democratic tax increase. He won’t sign a Republican no tax increase. So what does he want?”
Chris McClure, public information officer for the administration’s Office of Policy and Management, said Malloy wants to cut back on expenditures and municipal aid. Despite House Democrats’ calls for a sharp increase in the state sales tax, the governor has stressed that he will not sign a budget that relies heavily on tax hikes to bridge the multibillion-dollar gap.
Fasano credits Malloy for opposing Democrats’ proposed tax hikes but rejects his plan to cut back on municipal aid. Such cuts, Fasano said, would simply shift the fiscal burden onto municipalities, which would have to levy taxes of their own to make up for the loss in state aid. Instead, he advocates severe spending cuts and a broad overhaul of the state’s labor laws.
Until lawmakers reach an agreement, the state will continue to be funded by executive order. On June 30, Malloy signed an order declaring a fiscal emergency and appropriating funds to support the “essential functions” of state government. The bare-bones interim plan relies on deep cuts to municipal aid and social services.
Even under the governor’s austerity measures, though, the state is on track to run a $94 million deficit this fiscal year, according to a monthly report published on Aug. 21 by the Malloy administration. The executive order will continue to fund the government until the legislature passes an alternative appropriations bill.
In the meantime, the clock is ticking for the state’s municipalities. The real crunch will begin in October, McClure said, when municipalities will have to go without their regular state aid payments if the governor has still not received and signed a budget from the legislature. For small towns that lean heavily on state funds, that could mean insolvency is just a few months out on the horizon.
The House is currently scheduled to vote on Democrats’ proposed budget on Sept. 14, but Fasano said that date is “unrealistic” and the overall outlook bleak.
“Under [former Connecticut Gov. Jodi] Rell, I always saw a pathway,” he said. “In other words, I could see how a resolution could be found. This time, I do not see a resolution. … It’s just a different situation that the state has never faced before on so many different levels.”
Connecticut and Wisconsin are the only two states still without budgets for fiscal year 2018.
Contact Jacob Stern at firstname.lastname@example.org .