HARTFORD, CT —The state Senate’s 33-3 vote Thursday morning on a $41.34 billion, two-year budget may be one of the final steps in ending an historic four-month budget stalemate.
Sens. Gary Winfield, Joe Markley, and Len Suzio voted against the budget.
The budget, which is the culmination of more than 20 days of negotiations between Democratic and Republican legislative leaders, doesn’t increase the sales or income taxes and doesn’t cut municipal aid as deeply as previous iterations.
The budget does increase taxes on everything from a 45-cent cigarette tax to a new 25-cent fee on every Uber or Lyft ride. It also raises taxes on low-income working families who won’t receive as big a tax credit as they did last year. The budget continues to fund the property tax credit for homeowners with dependents and senior citizens.
The budget, according to spreadsheets being shared by lawmakers who were still waiting at 10 p.m. Wednesday for official budget documents, shows a $874.8 million increase in spending in 2018 over the current 2017 levels and $168.6 million increase in spending in 2019. However, some of that additional money will be offset by the hospital tax.
The budget proposes increasing the hospital tax to leverage more federal reimbursement, which then would be partially distributed back to the hospitals in a more favorable way than it’s currently done. The Connecticut Hospital Association had negotiated the increased tax with legislative leaders. It’s still unclear if the federal government will endorse the proposal.
Gov. Dannel P. Malloy, who was left out of budget negotiations for most of the past month, has said he doesn’t support an increase in the hospital tax. He did support it when he believed he had reached a universal budget deal with Democratic legislative leaders, but that budget proposal never made it to his desk. Instead, it was the Republican budget that made it to his desk with the help of eight Democratic legislators.
Malloy has been running the state by executive order since July. At the end of July, in a mostly party line vote, the General Assembly approved a labor deal that guaranteed no layoffs for four years, but proposed other savings to the state through the health and pension changes to its agreement with state employees.
The labor package helped the General Assembly save about $1.57 billion over two years and lower the deficit they had to close to $3.5 billion over that same period of time.
However, Republicans felt the deal, which goes through 2027 will tie their hands and limit the changes they can make to Connecticut’s relationship with state employees. But as part of the compromise budget deal, Republicans dropped their requests to change pension calculations in 2027 and beyond.
The budget does include language that requires the General Assembly to affirmatively vote in order to approve state employee collective bargaining agreements and arbitration awards.
Senate President Martin Looney, D-New Haven, and Senate Republican President Len Fasano, R-North Haven, said they hit a small snag when they found an error in one of the formulas, which delayed debate a few hours, but it wasn’t anything they couldn’t overcome.
They began the long-awaited debate on the budget at 11 p.m. Wednesday.
“It is a movement in the right direction,” Fasano said, describing the compromise.
It’s the first time since 2007 that Republicans and Democrats have negotiated and approved a budget. In 2008, the first year Barack Obama ran for president, Democrats gained a supermajority in the General Assembly with 24 in the Senate and 114 in the House.
Since that time Republicans have continued to pick up seats and drew even in the Senate this year and gained eight more seats in the House this year bringing their numbers up to 72. Democrats still hold a 79-72 majority in the House.
Regardless, it might be the first time in recent history both parties have dismissed the governor and gotten a deal on their own.
Malloy who received a copy of the budget around 4:30 p.m. Wednesday didn’t say what he would do with the budget when it reaches his desk. Legislative leaders have suspected they will need a veto-proof majority.
Looney said voters expected lawmakers to work in a bipartisan manner when they voted to return them on such a close political divide.
Winfield, another Democrat from New Haven, said he disagrees. He said the people in his district voted for him. They didn’t have a say on who was voted in statewide.
He said he’s struggling with his vote on the budget because in adding up all the good and bad, he’s not sure the good outweighs the bad.
One of the things he doesn’t like are the clean energy sweeps.
The budget does sweep more than $170 million in clean energy funds over objections from those in the industry, who threatened a lawsuit against the state late Wednesday.
It also makes changes to the Citizens Election Fund by increasing the amount individuals can donate to campaigns. It also restricts the enforcement authority of the State Elections Enforcement Commission.
The budget provides relief to those with crumbling foundations, working families who receive a subsidy to help pay for their daycare, and it restores funding for day services for those with intellectual and developmental disabilities.
“It takes a lot for me to get excited what happens in this building,” Sen. John Fonfara, D-Hartford, said. However, when he participated in the closed-door budget negotiations “ … I saw people not forgetting core beliefs, but leaving their politics at the door to find a path to get us here today.”
He said he’s never been prouder to be a legislator.
He said the creation of a volatility cap, bonding cap, and spending cap will improve Connecticut’s standing with Wall Street.
Sen. L. Scott Frantz, R-Greenwich, said the budget is fiscally prudent and it’s “really good for our reputation.”
He said it puts Connecticut on a better path toward sustainability.
Municipalities who called on lawmakers to override Malloy’s veto of the Republican budget said they support the bipartisan budget proposal.
“The bipartisan budget will better position towns to control costs and property taxes going forward,” Litchfield First Selectman Leo Paul said. “Increasing the prevailing wage threshold and ensuring that towns can rely on volunteers to donate services will help municipalities stretch limited budgets to support building and infrastructure projects.”
Elizabeth Gara, executive director of the Connecticut Council of Small Towns, said there’s a lot to like in the budget. It makes changes to binding arbitration laws and the state’s minimum budget requirement.
“It also allows a regional board of education to establish a finance committee, which would provide towns with greater budgetary oversight,” Gara said. “Education is the big cost driver in local budgets. Although the budget includes some reductions in education funding, these reforms will help towns rein in costs without undermining the quality of our children’s education.”
The Education Cost Sharing formula would cost an additional $380 million over fiscal year 2017 grant levels when fully phased in, according to the Connecticut School Finance Project. It also ends the practice of allocating ECS funds to towns via arbitrary block grants. The proposal also increases special education funding by $6.6 million, for a total increase of $387 million by fiscal year 2028.
The governor’s desire to shift between $280 and $400 million in teacher retirement costs to cities and towns was not included as part of the bipartisan budget. But a one percent increase in what teacher’s contribute to their retirement was included.
Markley a Republican from Southington, said he voted against the budget because he didn’t believe there was more good in it than bad. He said the good in the budget is the structural reforms “but I have limited faith in those structural reforms.”
He also objected to the $40 million in borrowing for the XL Center in Hartford. He said it’s a “downpayment on an ill-begotten project.”
The budget includes $26 million in emergency funding for at-risk communities like Hartford and there’s an additional $20 million per year in debt service for Hartford.