Conn. Lawmakers Respond To Malloy's Budget

Apr 27, 2015

Update: April 30- The Connecticut Legislature's Finance Committee has approved a plan that includes tax hikes of $1.8 billion over two years.

The plan increases the income tax rate for Connecticut's wealthiest residents. It also lowers the overall sales tax rate, but extends it to new services, like accounting, dry cleaning, and veterinary services.

The plan was approved on Wednesday, two days after the Democrat-controlled Appropriations Committee approved a two-year, $40.5 billion budget that restored many of the social and human service cuts Democratic Governor Dannel Malloy had proposed.

State Senate Minority Leader Len Fasano (R-North Haven) said the Malloy should remember his campaign promise not to raise taxes.

"He should be rejecting this budget out of hand and say to the democratic majority, 'I will veto this budget if it comes to my desk. I told you Connecticut was saturated with taxes. I told you I didn't want any more taxes.'" Fasano said.

A Malloy spokesman said the governor believes the plan asks too much of taxpayers.

Malloy and legislative leaders will negotiate a final budget in the coming weeks.

File Photo- Connecticut Gov. Dannel P. Malloy delivers his budget address to the senate and house inside the Hall of the House at the State Capitol, Wednesday, Feb. 18, 2015, in Hartford, Conn.
Credit AP Photo/Jessica Hill

Update: April 27-

The Connecticut State Legislature's Appropriations Committee released its revision of Governor Dannel Malloy's two-year, $40 billion budget proposal yesterday. The committee restored much of the funding to social services, Medicaid providers, and other programs cut in Malloy's budget. They did so by calling for about $600 million more in spending. And they would also reinterpret a state law dictating how much can be spent in the budget- the state's spending cap.

The spending cap is supposed to make sure the state doesn't spend more than its residents are making. It's based on income and inflation rates. And the committee says they can interpret one part of the law to mean the spending cap doesn't have to include certain long-term debt.

State Sen. Beth Bye (D-West Hartford) said the committee decided that long-term expenses, like "teacher retirement, juror retirement, state employee retirement, and other post-employment benefits represent long-term indebtedness, and that should not be counted under the cap."

Ellen Schimitz of Connecticut Voices for Children says reinterpreting the cap allows state lawmakers to prioritize immediate needs.

"Do you want to prioritize the interest payments on debt, or do you want to prioritize the basic responsibility of government?" she said.

But University of Connecticut economist Fred Carstensen says by moving money around without saving money, lawmakers are just going in circles.

"They can’t avoid the spending cap," he said. "So we might be in kind of a budgetary cul-de-sac."

Bye says she's consulted with attorneys, and they've told her this interpretation of the spending cap is legitimate.