Gov. Dannel P. Malloy’s budget director tried to be as vague as possible about whether the governor will propose a tax increase when he releases his budget next week to the General Assembly.
“It’s the governor’s budget and I don’t want to speak for him on that,” Ben Barnes, Malloy’s budget director, said Tuesday when pressed by reporters.
He said ruling out tax hikes is one of those things people often do, but it’s going to be a tough year and “we all have to keep our options open.”
But Malloy spokesman Devon Puglia quickly put the question of tax hikes to rest.
“The governor is not proposing tax increases, nor will he support them,” Puglia said. “This is a tough budget that will require a different solution.”
Barnes also said he didn’t anticipate any tax hike proposals from lawmakers, who are all up for re-election this year.
House Speaker Brendan Sharkey, D-Hamden, said in an interview Tuesday that he also doesn’t anticipate lawmakers proposing any tax hikes this year.
On the campaign trail in 2014 Malloy pledged not to raise taxes, but he signed a budget last year that increased taxes nearly $2 billion.
Meanwhile, the budget picture Barnes painted Tuesday for a group of 100 advocates was fairly grim.
He told them the 2017 budget adopted last June by the General Assembly is already $560 million less than the revenue projections adopted earlier this month.
“That’s how much ground we’ve lost,” Barnes said.
Barnes said six years ago he hoped the Rainy Day Fund would be around $2 billion, but it’s around $406 million. That means the deficit the state is currently facing, if nonpartisan budget analysts are correct, is greater than the Rainy Day Fund.
“I’m nervous about its ability to keep us dry over the next few months,” Barnes said.
The prospect of a half-billion dollar hole in the budget makes it really hard to find solutions.
“There are very limited approaches you can take to do that,” Barnes said. “You can raise taxes or you can make extraordinarily challenging cuts to services. Or some combination of them.”
The likelihood of deep spending cuts is bad news for advocates who gathered Tuesday for CT Voices for Children’s annual forum.
A report from CT Voices for Children found that the portion of the budget dedicated to children and families has fallen over the over the past two decades from 40 percent to 30 percent.
“The declining share is largely a result of the increased share of the budget dedicated to debt service and employee benefits. Even though there was an increase in funding in education and health care since 2010, these investments were insufficient to keep pace with the needs of children and families,” the advocacy organization concluded.
Barnes said one of the themes of the budget this year will be the need to identify “core services.”
He said the state needs to concentrate on keeping “basic services” going.
Another theme this year will be the need to focus on outcomes.
He said there needs to be a broader level of accountability for these big, expensive state programs, if the state is going to continue to fund them.
The need for performance-based budget and accountability was echoed by Sharkey.
Sharkey said the state needs to fundamentally change how it thinks about funding services. He said municipalities should not get the same level of state funding, if they continue to avoid achieving efficiency through regionalization. He suggested the state could even save some money if cities and towns don’t agree to share services.
The days of subsidizing cities and towns with state funds without accountability is over, according to Sharkey.
