Anti-poverty advocates and residents who benefit from the state’s social service programs visited the state Capitol to lobby lawmakers Wednesday against many of the $1.3 billion in spending cuts included in Democratic Gov. Dannel P. Malloy’s budget.
Decisions to drop parents from the state’s Medicaid program for low-income families, reduce reimbursement for doctors who accept Medicaid patients, and to reduce funding for legal service programs and families of children with disabilities are just a few of the spending cuts advocates find unacceptable.
Sen. Beth Bye, co-chairwoman of the Appropriations Committee, told advocates Wednesday that there are many cuts she also finds “untenable.”
But this year’s budget is “a really difficult puzzle,” Bye said.
It’s difficult partly because it’s $54 million over the spending cap in 2016.
The cap, which was instituted at the same time as the income tax, is calculated by tying increases in state spending to either personal income growth or the rate of inflation. The governor’s budget director discovered days after unveiling the budget that it was $54 million over the spending cap based on erroneous data. But the governor declined to offer any revisions and left any changes up to the legislature.
Last week, Bye said the committee is looking at all of its options when it comes to putting together a spending proposal.
There are people who think “we shouldn’t look for ways around the spending cap problem” and there are others who believe it’s okay to move spending outside the cap, Bye said. All of those options are being weighed.
The General Assembly would need a three-fifths majority to approve spending beyond the cap. That would require bipartisan support, which doesn’t exist. Several Republican lawmakers have said they have a strict interpretation of the spending cap and will be watching the Democratic majority closely to see what they decide to do with the budget.
Meanwhile, there are advocates who would prefer the state look at increasing revenue.
Tom Swan, executive director of the Connecticut Citizens Action Group and a member of a coalition in favor of revenue increases, said the budget Gov. Malloy proposed is “unconscionable.”
He said it’s just wrong to ask people at the lower end of the economic spectrum to sacrifice so much without asking anything of higher income earners. Swan said they are advocating for a number of revenue enhancements, including an increase in the income tax and rolling back some tax exemptions.
Connecticut Voices for Children, which is also part of the coalition, is advocating an increase in the top marginal income tax rate from 6.7 percent to 7.5 percent. They say that change alone will increase revenue by $300 million. They also are advocating the elimination of certain tax exemptions that could net an additional $470 million. And they support a tax on candy and sugary beverages because it could help raise between $140 and $179 million.
But even if lawmakers were able to increase revenue the spending cap could limit their ability to spend it.
“Certainly, the spending cap is as much of a problem from a budgeting standpoint as the lack of revenue,” House Speaker Brendan Sharkey, D-Hamden, said this week. “It’s a complicating factor in the overall budget equation.”
He said lawmakers are looking at how to stay within the cap and still produce a budget that’s balanced. He said the situation wasn’t helped by the calculation error in the governor’s budget, but that mistake “is what forced us to realize we have to start over again and completely rework the budget.”
Sharkey said he’s still not keen on offers of increasing revenue at this stage in the budget process.
“I’m still holding out an expectation that we’ll be able to avoid new revenues,” Sharkey said.
