(Updated 7:29 p.m.) Gov. Dannel P. Malloy and Democratic legislative leaders cut and borrowed their way out of a deficit and were still able to increase total state spending by about $143 million, according to the latest budget bill.
Democrats were forced to adjust the second year of the $40.11 billion budget when revenue projections didn’t meet their targets last month and the state discovered that revenue was about $150 million short in 2012 and $235 million short in 2013.
Budget Director Ben Barnes suggested diverting about $222 million in funds designated to pay off borrowing the state did in 2009 to close the 2012 deficit. Republican lawmakers panned the idea, but Barnes defended it, arguing the promise to pay those Economic Recovery Notes didn’t carry much weight with the credit rating agencies. He has said that paying off the debt at a slower pace wouldn’t hurt the state and would only save about $8.7 million over the next four fiscal years.
Even with the 2012 deficit resolved, most of the big policy initiatives such as education reform are in the 2013 budget. The 2013 budget maintains most of the increased funding Malloy planned to attribute to his education proposal.
The 1 percent increase in spending is attributed largely to changes to the state employee pension fund and the education reform package, which was a priority for Malloy this year.
The new budget bill, which could be voted upon as early as today (Monday), eliminates the Department of Transportation’s scheduled 4 percent fare increase for bus and ADA transit riders. The increase was expected to go into effect on Jan. 1, 2013.
The bill would reduce the general fund contribution to the special transportation fund by about $70 million and decides to use borrowing to cover the $30 million it planned to spend on town aid for road repairs. The budget also maintains $8.5 million for a 1 percent cost of living increase for private service providers who contract with state agencies.
Further, the new budget restores a $160,000 line item for stocking pheasants, funding for which had been stripped under Malloy’s previous budget proposal. The elimination of the mostly self-sustaining fund prompted an outcry from sportsman across the state.
The budget also revives a $7.6 million cut lawmakers had hoped to restore to the Teachers Retirement Board.
Currently, the state pays a third of a $110 monthly contribution toward health care costs for retired teachers while active teachers pay a third of that $110 and the retiree pays a third. But the revised budget reduces the state’s share from 33 percent to 25 percent and shifts the additional cost to the retiree, bringing their portion up to 42 percent. The budget released Monday holds retirees harmless and takes the state’s contribution from the Teacher’s Retirement Fund. A move Republican lawmakers said will make the retirement fund unstable.
Another cut lawmakers had hoped to avoid involves the Medicaid program for low-income adults. The budget document seeks to impose a $10,000 asset test for anyone who applies for the program. At least some lawmakers believed this move was an attempt to gut the program, which gives health care benefits to low income and disabled individuals.
House Minority Leader Lawrence Cafero, R-Norwalk, said the Democratic leadership and governor decided not to adjust the revenue estimates for 2013 even though they’re coming in lower than projected.
“Since the beginning of this session the revenue picture has gotten worse,” he said. “One of the biggest ironies is the governor is using all the gimmicks that he once ran against and two he pledged never to use.”
Raiding $70 million from the special transportation fund, which is levied through gasoline taxes, is another one of those gimmicks Malloy promised to avoid when he was on the campaign trail, Cafero said.
“Every gimmick you can think of is being used in this,” Cafero said.
Check back later as this report is updated