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In a night of high drama, the longest-running budget impasse in Connecticut’s 230-year history took a stunning turn early Saturday morning, as Democratic lawmakers in both chambers of the legislature broke from their party to pass a Republican-backed budget.

Gov. Dannel Malloy said in a statement that he would veto the measure, calling it “unbalanced” and sending lawmakers back to the drawing board to craft a “realistic and, ideally, bipartisan” alternative. State Rep. Dave Yaccarino, R-North Haven, told the News that the legislature’s Republican leadership plans to meet with the governor early this week to discuss a possible compromise, with the bill that passed both chambers as a jumping-off point.

As late as Friday afternoon, a budget negotiated between Malloy and top Democratic legislators seemed on course to pass along party lines in the Senate. But the chamber descended into chaos when three Democratic senators unexpectedly defected, shattering their party’s fragile consensus.

The Senate instead passed a Republican-backed budget by a 21–15 margin, with the three Democratic deserters voting in favor of the bill. Hours later, six house Democrats joined their colleagues across the aisle to pass the same budget, even though Democrats outnumber Republicans 79–72 in that chamber.

“Yes, I may be risking my political career,’’ announced Sen. Paul Doyle, D-Middletown, the first of the three deserters and a 23-year veteran in the legislature. “My party may not be happy with me. But, to be honest, I don’t care.”

The two-year, $40.7 billion budget passed Saturday would close a projected $3.5 billion deficit over the 2018 and 2019 fiscal years. Democrats’ plan relied largely on an assortment of tax hikes — amounting to $1.5 billion in new revenue over this fiscal year and the next — to close the multibillion-dollar gap. The Republican budget instead makes deep cuts to the University of Connecticut and assumes state-employee union contracts will undergo significant change in the coming years.

In a message sent to students, employees and alumni Saturday, University of Connecticut President Susan Herbst called the plan “appalling.”

Yaccarino admitted that the budget is not perfect but said it’s a vast improvement from Democrats’ proposal.

“We waited nine months for the budget that came out on the other side of the aisle,” Yaccarino said. “And it was horrible.”

The state has now missed its budget deadline by more than two-and-a-half months. And with the Wisconsin House of Representatives having just passed a budget backed by Gov. Scott Walker after an 11-week delay, Connecticut will soon be the only state without a budget for fiscal year 2018.

Until lawmakers reach an agreement, the state will continue to be funded by an executive order signed by Malloy on June 30. That order declared a fiscal emergency and appropriated 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.

While lawmakers deliberate, the clock is ticking for the state’s municipalities. Come October, states will have to go without their regular state aid payments if the governor has still not received and signed a budget from the legislature, said Chris McClure, secretary of the Office of Policy and Management.

For small towns that lean heavily on state funds, that could mean insolvency is just a few months away. And if Hartford doesn’t soon receive a roughly $45 million bailout package, the city will have to file for bankruptcy, Mayor Luke Bronin ’01 LAW ’06 has said.

In New Haven, the situation is not so dire. Still, the city is one of the largest recipients of such state aid payments, in large part because it hosts a number of major non-taxable institutions, including Yale University and Yale New Haven Hospital.

City spokesman Laurence Grotheer told the News that state payments usually begin in early September, so the fiscal chaos is already costing the city. If the crisis is not resolved soon, Grotheer said, the city will be in serious danger of not being able to meet payroll and pay its vendors.

“Once this issue gets up to 90 or 100 days, the city starts to run out of money,” Grotheer said.

Jacob Sternjacob.stern@yale.edu | @jdkstern13 

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