Governor releases options for state budget deficit mitigation - WFSB 3 Connecticut

Governor releases options for state budget deficit mitigation

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    Friday, December 1 2017 2:25 PM EST2017-12-01 19:25:10 GMT
    Friday, December 1 2017 5:27 PM EST2017-12-01 22:27:47 GMT
    (WFSB file)(WFSB file)

    Connecticut's comptroller said on Friday that the state is projected to end the 2017-2018 fiscal year more than $200 million in the hole.

    More >

    Connecticut's comptroller said on Friday that the state is projected to end the 2017-2018 fiscal year more than $200 million in the hole.

    More >

The governor sent a letter to the leaders of both the House and Senate with a “menu of choices” for them to review to help resolve the about $208 million current year deficit. 

Earlier this month, Connecticut's comptroller Kevin Lembo stated that the state is projected to end the 2017-2018 fiscal year more than $200 million in the hole. Lembo released a budget deficit projection of $208 million on Dec. 1.  

Lembo said since it's more than 1 percent of net appropriations in the state's main spending account that's the threshold requiring Democratic Gov. Dannel P. Malloy to issue his mid-year plan.

In a letter from the governor, the governor stated some options to resolve the deficit.

  • Closing the Old Statehouse on Jan. 1
  • Closing intake for care for kids from waiting list
  • Reducing grants for substance abuse services 

The governor also wants to boost revenue. He said his proposal plan exceeds $300 million and includes:

  • Increasing the sales and use tax to 6-and a half percent
  • Raising the restaurant tax from 6-and a half percent to 7
  • Dumping the minimum bottle pricing which is aimed at lowering liquor prices

“I understand that these options will be almost universally objectionable and that there is little appetite among you or your members for making such adjustments to your budget,” Malloy said in the letter.  “In fact, I agree these changes are difficult and that in better economic times, with a balanced budget, none of us would put them on the table for consideration.  However, I have a clear statutory obligation to provide you with a plan to mitigate the deficit.  Moreover, I believe we do a disservice to the public when we defer necessary steps and fail to take decisive action, ultimately making the cost to taxpayers and damage to government services even more severe.”  

To read the full letter by Malloy, click here.  

“Democrats and Republicans have already proven that we can work together to find bipartisan solutions - including cuts and revenues - to address Connecticut’s budget. I appreciate the work of the administration in developing a plan to bring the budget back into balance. It is important that in the coming days leaders from both parties review the proposal and once again work together to find a responsible bipartisan solution," Senate President Pro Tempore Martin M. Looney (D-New Haven) said in a statement on Wednesday.

Republican lawmakers are looking to restore funding to the Medicare savings program, which is a popular social services program.

"Restoring about $50 million to pay for medicare assistance program which helps poor people pay for their deductible, co-pays, that kind of thing," Mark Pazniokas with CT Mirror said.  

Legislators aren't supposed to go back into session until February, but some of them are looking to go back into the office before Christmas.  President Pro Tempore Len Fasano said in the letter to Gov. Dannel Malloy on Tuesday about a possible Special Session. 

"Although I fervently believe that the Speaker of the House and President of the Senate can call us into Special Session as provided for in  C.G.S.  2-7,  the Democratic leadership does not believe they have that authority," Fasano said. 

However, Fasano said a Special Session called for the two following methodologies: 

  • by acting as Governor
  • a petition signed by 51% of the members of the House and 51% of the members of the Senate

Fasano went on to say if a petition is submitted, the Secretary of the State must schedule Special Session between 10 – 15 days after receiving the required number of signatures. 

"But the governor has no interest in calling them back unless they are agreeing to do the whole package and not just the popular piece of it. He's saying if you're coming in, come in to do some really hard things," Pazniokas said. 

The Medicare program was still cut in the bi-partisan budget. Meanwhile, the governor wants legislators to address the full budget deficit, not just the medicare program. 

“Let’s get this straight – Republican leaders have issued a statement to press about a letter they sent to Democratic leaders regarding a proposed letter they may send to the Governor in which they ask him to call them into session – and even if he does they still won’t act to close the deficit in the bipartisan budget?  And this all has to be done right away.  Do we have that right? This is absurd.  Republican leaders shouldn’t need the Governor’s permission to come in and do the jobs they were elected to do.  Especially when the administration has already delayed changes to the Medicare Savings Program that provide them with the luxury of time to thoughtfully address this particular issue well into the new year. If and when the legislature does in fact call themselves in, the Governor strongly believes that they should address the full deficit facing the state," Malloy’s Director of Communications Kelly Donnelly said in a statement on Tuesday. 

On Wednesday, Fasano said he has the options on deficit mitigation from the governor and is reviewing the options. 

“At first look, a nearly $200 million tax increase is a nonstarter for our state. Connecticut is suffering deficits due to a sluggish economy created by years of historic tax increases passed by Gov. Malloy and Democrat lawmakers without any thought for how these taxes would hurt our state in the long run. I have serious concerns about many aspects of the governor’s menu of options, but I will continue to review the full list of choices in detail and look forward to meeting with fellow legislators to outline an appropriate course of action," Fasano said in a statement on Wednesday. 

The four caucuses are expected to meet this week and have the required number of signatures, according to Fasano's letter. He asked the governor to call for a Special Session on Dec. 19. 

"However,  it  seems  more  prudent  and  expeditious  if  you  were  to  call  us  into  Special  Session  on December 19, 2017, a date Republicans and Democrats have agreed to, we can quickly fix the MSP and “do  the  jobs  [we]  were elected  to  do.”   As  far as fixing the deficit,  once we receive your Deficit Mitigation Plan and have the opportunity to review the same in detail, I believe Republicans, Democrats and your office can sit down together, again, and figure out a solution to that deficit.  However, the pressing issue now before us is the MSP and, since we all agree it needs to be fixed, it seems eminently logical for you to use your power and call us into Special Session and bring relief to seniors who are very anxious about the issue," Fasano said in the letter.

To read the full letter by Fasano, click here

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