Depending upon who you asked, the budget adjustments debated in the House Monday night were either carefully tailored to reflect fragile economic circumstances, or they were a wad of gum plugged into a dam that’s about to burst.
The bill adjusts the second year of the $40.11 billion budget in light of revenue projections that didn’t meet their targets last month. The state discovered that revenue was about $150 million short in 2012 and $235 million short in 2013.
The bill passed 95-49 after more than three hours of debate.
Appropriations Committee Co-Chair Rep. Toni Walker acknowledged that consensus revenue estimates are about $200 million less than projected for Fiscal Year 2013, necessitating spending cuts and adjustments.
“This bill has been designed to be cognizant of the fact that we are in a very, very fragile state of affairs in this economic recovery,” Walker said. “We are rebounding, we know that, but it is moving slowly and things are starting to change. This bill also reflects the need to continue to give our state the support they require to continue in that direction.”
Walker listed some aspects of the bill of which she said she was proud: job expansion programs and adult training, bioscience initiatives like the Jackson Labs project, and the plan also doesn’t cut municipal funding.
“We know that the cities are waiting for the dollars that we’ve had and we want to make sure that we stay true to that commitment,” she said.
The bill also funds the compromise education reform package, which was released just before the budget debate started Monday night. The budget adjustments include funding for early childhood education, math and science preparations, and money to ensure students can read, she said.
“One of the things we heard over and over again — Little Johnny needs to read and we need to be there making sure that that happens and that’s what we do in this bill,” Walker said.
Walker conceded the legislation wasn’t perfect and included flaws and shortcomings, she said.
“But with the things that we had before us this year, this is a good bill and it ought to pass,” she said.
Not everyone thought so. Republicans said the bill was a return to the sort of gimmicks, smoke, and mirrors that last year’s $1.6 billion tax increase was supposed to avoid.
Rep. Vincent Candelora, R-North Branford, said last year’s budget was supposed to put the state back on the path to economic prosperity. This year’s budget adjustments represent broken promises, he said. Instead of being back on track, the state is just returning to the unsustainable budgeting policies it’s used in the past, he said.
“There is a crack in the dam and we are plugging that crack with chewing gum, and the biggest wad of them all is the sweeping of the Economic Recovery Notes,” he said.
Candelora was referring to the $222 million in funds previously designated to pay off borrowing the state did in 2009, which were diverted to close the 2012 deficit.
Republicans also criticized the legislation for taking $70 million from the Special Transportation Fund and failing to realize any of the savings that were supposed to come from the state employee “suggestion box,” as part of last year’s labor agreement.
“Here we are a year later and the savings have not been met, nonetheless the concessions were given and the state is now, whatever the latest numbers are — $284 million? Pick a number — under budget. We’re in the red,” Rep. Richard Smith, R-New Fairfield, said.
One thing that won’t be funded in the budget is the year’s payment on the state’s transition to Generally Accepted Accounting Principles. The GAAP transition is required by fiscal year 2014, according to the governor’s first executive order.
Asked if his budget comports with the promises he made on the campaign trail in 2010, Malloy replied “yes.”
House Minority Leader Lawrence Cafero said the lack of funding for the GAAP transition represented a broken promise by the governor.
“He held this up as the signature issue and now because he mishandled the budget it will not happen. So much for Executive Order 1?” he said.
However, Ben Barnes, the governor’s budget director, said Republicans were staying on factually incorrect talking points when it comes to the budget.
Failing to make a down payment on the transition this year does not break the law, which requires that available surplus be used to fund the transition, he said. Unfortunately, this year the deficit has left no funds available, he said.
“That was the law of the land a year ago, that’s the law of the land now,” he said.
Republicans offered their own adjustments through an amendment which, among other things, set aside $50 million for the GAAP transition. The amendment also froze longevity payments for unionized state employees and eliminated them for all others.
The amendment would have eliminated funding for the Citizens’ Election Program and transferred the money into the General Fund. It would have also diverted state funding to the New Britain-to-Hartford busway to transportation infrastructure projects. The Republican budget would have also ended the state Earned Income Tax Credit passed last year.
Rep. Sean Williams, R-Watertown, said the Republican budget “offers the dose of medicine this state needs to get the economy back on track.”
“We can’t keep doing the same thing over and over and over again because we’re getting the same results, and we all know what that produces,” Williams said.
The amendment failed along party lines.
The bill still needs to be approved by the Senate.