Connecticut entered its 108th day without a state budget on Monday.
Gov. Dannel Malloy released his fourth budget proposal for fiscal year 2018-2019 shortly after 10 a.m.
It calls for $150 million in additional spending cuts, which affects state agencies and social services.
It also includes $20 million in cuts to municipal aid, not education funding. Cuts to education funding would be phased in.
The budget also creates a spending cap, mandates relief and reduces income tax credit for low-income families.
Read the whole proposal here.
Malloy discussed the new proposal during a news conference just after noon.
He said the new budget eliminates numerous tax increases, cuts additional spending, and focuses on structural changes and language he called necessary to implement the biennial budget.
“This is a lean, no-frills, no-nonsense budget,” Malloy said. “Our goals were simple in putting this plan together: eliminate unpopular tax increases, incorporate ideas from both parties, and shrink the budget and its accompanying legislation down to their essential parts. It is my sincere hope this document will aid the General Assembly in passing a budget that I can sign into law.”
Malloy issued these bullet points on his proposal:
“As with every budget I have put forth, I remain open to making changes and improvements to this document,” Malloy said. “No budget is perfect, and none of us have the market cornered on good ideas. At the same time, we must keep in mind that time is of the essence if we want to avoid the most difficult cuts to towns, hospitals, and nonprofits. Simply put, we need to act now on behalf of our constituents.”
Also under the new proposal, there would be added fees at the Department of Motor Vehicles, where registrations and driver's licenses would increase 20 percent to generate $49 million for transportation.
Democratic and Republican lawmakers continue to try and hammer out their own deal.
Senate President Pro Tempore Martin Looney, a Democrat representing West Haven, released a statement on behalf of his constituents following the release of the governor's proposal.
“We intend to review the governor’s latest budget proposal," Looney said. "It is important that all parties make progress toward reaching a final budget agreement that provides predictability and stability for families, school districts, social service providers, and businesses.”
Speaker of the House Joe Aresimowicz had a similar statement.
“I appreciate the governor’s effort to try and help move our budget negotiations toward a final agreement," Aresimowicz said. "I look forward to fully reviewing his latest compromises, and continuing our bipartisan discussions on how best to move our state forward and get to a budget that becomes law.”
Lawmakers have been trying to figure out a way to cover a projected $3.5 billion shortfall in a roughly $40 billion two year budget.
They said they have agreed on some smaller items.
However, they've yet to reach a deal on a spending cap and money for schools.
Democratic leaders say they're willing to look at what the governor is proposing, but Republicans are skeptical saying it's similar to the Democrats budget that didn't pass and would have a tough time passing this time.
"It's a distraction in regards to four caucuses sitting in that room day after day and making progress towards getting a budget together and we will continue to do so,” said Republican State Rep. Themis Klarides.
They said they hope to have an agreement by Friday.
Another development on Monday was a report showing that there are 60 cities and towns now under review by Moody’s Investor Service for a credit downgrading.
Three school districts are also being looked into -- regional districts 8, 10 and 19.
All of these communities have a total of $3.5 billion in outstanding debt.
If the ratings get dinged, it could be much more difficult for affected communities to borrow money, which Quinnipiac Business Professor David Cadden says can cripple a community’s ability to tackle important projects.
West Haven currently has the worst credit rating out the ones under review.
"This is devastating news for our state. The governor’s decision to reject the only budget that passed the legislature, along with years of failed policies, created the instability our towns and cities face today. It created chaos on top of an already damaging fiscal crisis. Those who refused to override the governor’s veto are complicit in this failure to fund towns, cities and social services. Today’s news makes it clear that shifting more burdens onto our towns and cities is no way to balance the state budget and why I will continue to advocate for a budget that creates stability and protects our municipalities, our schools and our property taxpayers from more burdens, just as they were protected in the budget the legislature already passed," said Senate Republican President Pro Tempore Len Fasano.
In a statement, Joe DeLong, executive director of the Connecticut Conference of Municipalities, said “Such action only serves to reinforce that while state legislative leaders claim to have been meeting in good faith to resolve the state budget impasse, the time for action on a state budget agreement is now. This announcement highlights the past nine months of failures by the Governor and General Assembly to enact a state budget. These actions by Moody’s will have a devastating impact on nearly 60 communities across the state -- subjecting each of them to a credit downgrade that will increase their borrowing costs, potentially explode their property tax rates, and limit their ability to fund necessary municipal projects both in the short-term and long-term. Sadly this could have all been avoided.”
Stay with Channel 3 for continuing coverage of the state's budget crisis.
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