(Updated 8:10 p.m.) Gov. Dannel P. Malloy and his staff weren’t available this weekend to go over changes to the state budget, but on Monday gave Democratic legislative leaders a 107-page budget revision that doesn’t increase taxes and cuts $42 million more than his April budget revision.
The second revision, like the first, doesn’t increase taxes, but it restores some education funding and hospital funding. At the same time it gives up $50 million in new revenue for his 30-year transportation initiative — noting that the transportation fund lockbox legislation has not yet passed — and asks Democratic lawmakers to give up about $50 million in sales tax revenue scheduled to help municipalities lower their property tax burden.
With respect to hospital funding, the plan says that “despite a worsening deficit” the governor would restore $40 million for hospitals compared to the administration’s April 12 proposal. The restoration would create a $120 million total supplemental pool of funds for the hospitals.
“This proposal makes great strides to find compromise with both Democrat and Republican plans while still maintaining the key priorities I’ve stressed throughout this session and especially in recent days; namely, it does not raise taxes, it does not borrow to cover operating costs, and it closes our deficit almost entirely with recurring, sustainable cuts,” Malloy said in a cover letter that accompanied the revisions.
“This proposal avoids one-time revenues or new revenue sources in favor of recurring cuts,” Malloy wrote. “It also keeps our commitment to nursing home wages, maintains critical long-term energy and environmental initiatives, continues to fund critical statewide marketing efforts, and increases DDS funding for employment and day and community residential services.”
Democratic legislative leaders after meeting with Malloy Monday evening said “dollar wise” they are still as far apart from the governor as they were Friday night.
“It’s a question of how do we bridge that gap,” House Speaker Brendan Sharkey said.
After a brief meeting with the governor, Sharkey said they are still more than $100 million apart.
Senate President Martin Looney, D-New Haven, said the governor was willing to look at a few more of the sweeps of off-budget accounts, but was not interested in postponing tax credits for businesses.
“That was a big revenue item that he’s not accepting any part of at this point,” Looney said.
Democratic legislative leaders estimated they could hold onto $60 million in revenue to help balance this year’s budget if businesses voluntarily gave up their tax credits and agreed to accept an enhanced credit in two years.
Malloy’s proposal adopts the formula Democratic lawmakers applied to education funding, however, sources say they have refused to give the administration the formula, so it’s still unclear exactly how close they are to a deal.
Looney and Sharkey remained hopeful the two sides could strike some sort of deal Monday night.
Meanwhile, Lori Pelletier, president of the AFL-CIO, said Malloy’s budget is “nothing more than putting lipstick on a pig.”
“Malloy’s ‘compromise’ budget is more of the same — cuts to working people and the most vulnerable in the state while not asking anything from the richest 1 percent,” Pelletier said. “What’s worse, the Governor is proposing to cut social services even deeper than either the Democrats or Republicans in the legislature.”
She said Connecticut should be looking to increase taxes on those who can afford it.