HARTFORD, CT — (Updated 11:47 a.m.) The Democratic-controlled Appropriations Committee would increase spending by about $200 million each year over Gov. Dannel P. Malloy’s proposal, but it would spare municipalities the burden of picking up the $400 million in teacher retirement costs.
The Democratic spending plan that is expected to be debated later Tuesday afternoon increases spending by $199 million in the first year and about $204 million in the second year of the budget. The two year total would be about $41 billion, with $20.3 billion spent in the first year followed by $20.75 billion in the second.
In order to help make up for sparing cities and towns the shift in the teacher pension costs, the Democratic spending plan would give them about the same amount of money they received this year from the Municipal Revenue Sharing Account, which was created in 2015 as a way to help share part of the state’s sales tax revenue with municipalities.
Lawmakers and local leaders objected loudly to the governor’s plan to move a portion of the teachers’ retirement system costs over to municipalities, saying it would force local governments to increase property taxes. The Malloy administration has argued that cities and towns can handle the cost shift and it would help them better negotiate teacher salaries, which are used in calculating pension costs.
But local municipal officials were still holding their breath Tuesday as they waited to see exactly what the proposal would mean for their cities and towns.
Like Malloy’s proposal, it takes $10 million from the Municipal Revenue Sharing Account to provide additional funding for the Education Cost Sharing formula, but it calculates the formula differently.
The committee’s bill would increase the education funding foundation from $11,525 to $12,356 per pupil. It also uses federal child poverty rates, rather than a student’s relative eligibility for free or reduced-price school lunches, to determine the weight to give to low-income students in the calculation. Further, the committee’s plan would increase funding for underfunded towns by 0.3 percent in the first year and 0.6 percent in the second year of the budget.
It also changes how hospitals are treated. Malloy’s budget would have eliminated the property-tax exemption for real property for hospitals and allowed municipalities to tax it. Malloy’s proposal would have raised about $213 million. The Democratic budget proposal restores the tax-exempt nature of the nonprofit hospitals.
The budget does carve out a few new programs, but it largely maintains the status quo.
The budget seeks to create a “Passport to the Parks” program by charging drivers $10 more for their passenger vehicle registrations. The proposal is estimated to generate about $14 million annually and would help fund state park maintenance and the fish hatcheries while providing free access to the state’s parks for residents whose vehicles are registered in Connecticut.
The budget would also provide $12 million in the first year and $15 million in the second year for a statewide marketing account for arts and tourism.
Lawmakers were behind closed doors discussing the proposal Tuesday morning.
The spending plan also assumes that the governor will find $1.56 billion in labor savings over the next two years.
It’s still unclear if the Democrat-controlled Finance, Revenue, and Bonding Committee will release a revenue package to match the increase in spending by the end of the week. On Tuesday, the Finance, Revenue, and Bonding Committee was holding its last public hearing on a number of bills that would increase a variety of taxes.
Democrats hold only a one-vote majority on that committee and are working toward consensus.