Gov. Malloy Warns Connecticut Requires Major Budget Changes

Feb 3, 2016

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. 3, 2016, in Hartford, Conn.
Credit Jessica Hill / AP

Update: 2:15 p.m.:

Democratic and Republican legislators are voicing concerns over Gov. Dannel P. Malloy's proposal for across-the-board cuts to state agencies and giving agency heads more latitude in deciding where to reduce spending.

Senate Majority Leader Martin Looney, a Democrat, said Wednesday that lawmakers are concerned Malloy's plan might weaken the legislature's prerogative to make certain budgetary decisions. He says a 1969 law helped to ensure fiscal parity between the legislative and executive branches.

Senate Republican Leader Len Fasano calls Malloy's proposal "reckless" for reducing discretionary agency accounts by 5.75 percent. He says it's the legislature's responsibility to examine the policy implications of spending reductions.

The Democratic governor told lawmakers Wednesday, the opening day of the new legislative session, that he has "no desire to diminish the General Assembly's right to set policy."

Gov. Dannel P. Malloy issued a somber warning to state lawmakers on Wednesday, cautioning that Connecticut's budget is not sustainable and that changes must be made to how the state crafts its budget in order to meet the "new economic reality.''

The Democrat said he expects the state's workforce will be reduced by more than 1,000 employees, either through attrition "or other means.'' His budget director had told the figure could be several thousand, depending on how state agency heads cover the spending reductions included in Malloy's proposed $19.8 billion plan.

"I don't take that lightly, but I do think it's necessary,'' Malloy said of the job cuts. "I will continue to work with our state employees to make sure those reductions are done fairly and with great care.''

Malloy's budget director, Ben Barnes, said the Democratic governor's plan realigns the budget with the level of resources the state expects today and in the future.

"The budget, I believe makes an enormous first step in meeting the new economic reality we face and does so in an responsible way,'' said Barnes, who briefed reporters. Wednesday marked the opening day of the new legislative session.

The state's continuing budget challenges are expected to dominate much of the discussion during this year's short session, which runs until May 4. Besides a small deficit in the current fiscal year, the new year that begins July 1 is projected to be about $500 million in the red. Deficits are also projected in the following years.

Malloy and Democratic and Republican lawmakers from both parties have said the state must make structural changes to its budget in order to stabilize the state's financial situation and make Connecticut attractive to business. This new legislative session comes shortly after General Electric announced plans to move its headquarters from Fairfield to Boston, despite last-minute efforts by Connecticut legislators last year to scale back some business taxes and appease the corporate giant.

It's unclear how many major changes will be made to the state budget, given the short time period of the session.  

Malloy proposed cutting spending by $569 million. He wants to limit state spending to available resources, address unfunded pension costs, focus on paying for core services and reform the budgeting process by not waiting until the final days to pass a new tax-and-spending plan.

This session, lawmakers and Malloy are crafting changes to the second year of the two-year, approximately $40 billion budget they passed last year.

"No budget will be perfect, but I firmly believe that by changing how we come to a budget bill, we can improve the final result,'' Malloy said. "So this is my challenge to you and to me. Let's not pass a budget on the final day of the session this year. Let's get it done early.''

Malloy is also pushing for legislation this session that would protect any revenues dedicated to transportation in a special, so-called "lock-box.'' Such a bill cleared the General Assembly late last year, but it did not by pass by enough votes to guarantee that a constitutional amendment will appear on the November ballot.

Malloy is pushing for the lock-box as he simultaneously touts a $100 billion plan to overhaul Connecticut's transportation infrastructure.