HARTFORD, CT — The 23-member commission that’s working to define a spending cap for the General Assembly to adopt next year needs a little more time to complete its work.
At what was supposed to be its final meeting Monday, Sen. Rob Kane, R-Watertown, proposed a complete definition of the spending cap for the commission to consider. The commission had been determining whether individual pots of money should fall under the spending cap. The commission, which had a Dec. 1 deadline, also sought to define various aspects of the spending cap.
Voters overwhelmingly approved a constitutional spending cap in 1992, but Attorney General George Jepsen opined last year that it has “no current legal effect.” The commission is working on a recommendation to the General Assembly to change that, but political differences over how to get there have stymied attempts to adopt a spending cap for 24 years.
Kane objected several times Monday to the “piecemeal” approach the commission was taking to defining various aspects of the cap.
“We have said all along these things are intertwined and should be part of one full package,” Kane added.
The cap was supposed to keep state spending increases in line with annual personal income growth or inflation, whichever is larger. Typically, lawmakers have been using personal income growth in its calculations, but income has been fairly stagnant in the state since the 2008 recession.
An increase in recent years to the mandatory payment for workers’ retirement benefits has posed problems for those looking to make sure there’s enough money in the state budget to fund education, health care and social safety net programs.
William Cibes, who co-chairs the Spending Cap Commission, proposed excluding from the cap pension payments required to fund the unfunded liability for that year starting in 2022. The proposal would bring spending on the unfunded portion of the pension liability under the cap once the payment has leveled off—a problem the state has yet to solve.
Bart Shuldman, chairman and CEO of TransAct Technologies Inc., said Cibes’ proposal was a five year deferral and not a gradual phase-in of pension funding.
“This in no way is a ramp,” Shuldman said.
He said he would prefer to see all pension payments included under the cap, but he realizes that’s an unlikely scenario.
Rep. Jonathan Steinberg, D-Westport, said he doesn’t believe a five year deferral of pension payments will get the three-fifths majority in the General Assembly it needs to pass as a constitutional amendment. Steinberg said that’s especially true now that Democrats hold a much smaller majority in the House, 79-72. There is an even split in the state Senate
Cibes’ proposal was approved 13-9.
Kane’s proposal, which didn’t get a vote Monday, would include spending for unfunded pension liabilities going forward starting in June 2017.
Kane said the proposal he put forward isn’t necessarily popular within his own party because it exempts billions in pension spending, but he felt the totality of his proposal would get the vote it needed for approval.
Sen. Michael McLachlan, R-Danbury, said he thinks the commission needs to think about what it can get across the legislative finish line.
He said Kane’s proposal seems to hit a lot more of those achievable goals than any of the 10 proposals put forward Monday for a vote.
McLachlan said he doesn’t like some of Kane’s proposal, but he’s desperate to get a “fully implemented spending cap.” He said he understands compromising on some of these items is tough, but “we have nothing now.”
He said he believes there are “some conservative like-minded Democrats” in both chambers who agree with a lot of these ideas. He said he also believes there are some Republicans who disagree with some of these ideas, “but it brings us much closer” to a working spending cap. He asked commission members to reevaluate their “Santa wish list” and see if there’s a better compromise.
The commission is expected to convene another meeting on Monday, Dec. 5 to discuss Kane’s proposal.
The legislature and governors have approved bypassing or exceeding the cap as it currently exists at least 8 times over the past 24 years.
In 2013, Gov. Dannel P. Malloy and lawmakers were unable to get the votes 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.
In 2015, the co-chairs of the Appropriations Committee unsuccessfully attempted to expand the definition of the spending cap without legislative approval or a legal opinion.