(Updated 5 p.m.) The Democrat-controlled Appropriations Committee budget would spend nearly $300 million more per year than Democratic Gov. Dannel P. Malloy’s budget and it reinterprets the spending cap to exempt pension contributions and other retirement benefits.
Sen. Beth Bye, D-West Hartford, and Rep. Toni Walker, D-New Haven, the co-chairs of the Appropriations Committee said they don’t believe long-term indebtedness was meant to be included in the spending cap calculation. Under that interpretation their budget is $1.5 billion under the spending cap.
“It’s our interpretation on this committee and with this budget that the long-term obligations of the teacher retirements, jurors retirements, state employees retirements and other post-employment benefits represent long-term indebtedness that should not be counted under the cap,” Bye said Monday at a press conference prior to the Appropriations Committee.
The cap was instituted back in 1992 to quell anger over implementation of a state income tax in 1991. It is calculated by tying increases in state spending to either personal income growth or the rate of inflation. Exceeding the spending cap or changing it would require a three-fifths majority, but Bye said the “existing spending cap” accommodates these exclusions.
Bye said she and Walker feel “really confident” in their interpretation of the spending cap, which has been exceeded or bypassed 8 times since it was implemented.
In 2013, Malloy and lawmakers were unable to get to 22 votes in the Senate and 90 votes in the House they needed to get around the spending cap, so they intercepted federal Medicaid reimbursements before they reached the general fund. The move essentially exempts them from being counted against the spending cap. Republicans opposed the move that year calling it a “gimmick.”
Similarly, this year, Bye and Walker are suggesting not counting long-term indebtedness toward the spending cap.
Asked if they had a legal opinion, Walker said they are not required to have a legal opinion regarding their interpretation of the spending cap in order to get it through the Appropriations Committee, however, one will be necessary before a vote on the floor.
Malloy, who was on his way Monday to testify before the Transportation Committee, was unable to immediately comment on the interpretation of the spending cap. But in 2013 Malloy was supportive of moving Medicaid dollars out from under the cap.
Rep. Vincent Candelora, R-North Branford, said defining the spending cap is a “non-starter” for him. He said he doesn’t believe the state should be breaking its promise to the public when it adopted the income tax.
“It’s fiscally irresponsible and fiscally dangerous in these economic times,” Candelora said.
House Minority Themis Klarides said moving more close to $2 billion out from under the spending cap is irresponsible.
“It’s a slap in the face to the public,” Klarides said.
In 2007, Republicans joined with former Republican Gov. M. Jodi Rell to exceed the state spending cap by $700 million. But Klarides said this is different because the Democrats are not asking for a three-fifths vote to do it.
At the press conference before the Appropriations Committee, Bye warned that they are not reinterpreting the spending cap to “spend, spend, spend.” She said the budget includes many difficult cuts, even though it restores nearly $236 million in 2016 and $278 million in 2017. The budget allocates $19.9 billion in the first fiscal year and $20.6 billion in the second fiscal year. It increases spending 4.6 percent in the first year, and 3.3 percent in the second year,
Bye said they restored funding to about 10 areas of state government, including the Department of Developmental Services, higher education, and hospitals. Bye said the largest amount of money they restored went to the hospitals because “we’re very concerned about the Medicaid rates and the impact on really critical jobs in our communities.”
They restored $39 million to Medicaid and hospitals, which they say will help increase the federal match to about $80 million for hospitals. They also restored $44.6 million to keep low-income parents and pregnant women on Medicaid, instead of forcing them to buy plans on the health insurance exchange.
The Appropriations Committee cut $59 million over two years to salaries for non-union employees, reduced overtime by $34 million, cut $5 million that would subsidize a transatlantic flight out of Bradley International Airport, and funding for two new charter schools in Stamford and Bridgeport.
“There were some very difficult cuts,” Bye said. “There were people who deserved to receive increases and raises we were not able to accommodate.”
The Appropriations Committee budget restored a lot of the spending cuts Malloy made to the safety net and higher education.
It restored the $18 million to community mental health services.
“We remembered our commitment that we made in Newtown to the families for mental health and making sure we provide those services,” Walker said.
They also restored about $13.9 million in cuts Malloy made to the Board of Regents, which oversees the four state universities and 12 community colleges. It also restored about $38 million to the University of Connecticut.
“Education is the way our children are going to get ahead and survive better than we are,” Walker said.
It also restores a $1.9 million cut to state parks and maintains funding for the fish hatcheries and pheasant stocking program.
“It’s part of the family structure,” Walker said. “Providing everybody with the opportunity to do things together and participate in things in Connecticut.”
The Appropriations Committee voted 33-24 Monday to approved the package. The Finance, Revenue, and Bonding Committee is expected to come out with a tax package to match the $40.6 billion, two-year spending package proposed by the Appropriations Committee.
