HARTFORD, CT — Gov. Dannel P. Malloy signed the technical changes to the budget that the General Assembly passed last week, but his signature came with a warning letter.
“Unfortunately, I am — once again — requesting that the General Assembly take action to correct a significant flaw when they next convene,” Malloy said in a message attached to the signed bill.
The bill the General Assembly passed last week sought to make changes to the hospital provider tax to address some of Malloy’s concerns about deficiencies in the language that would require the state to make the payments to the hospital, regardless of what action the federal government took.
Malloy said the funding for the Children’s Health initiative, which was part of the legislation, was removed from the general fund and placed in the Insurance Fund, which is supported through assessments of the insurance industry.
“The state can only assess for those activities specifically provided for by statute,” Malloy wrote. “The General Assembly, in transferring the operation of this program to the Insurance Fund, failed to adopt language that authorizes the insurance commissioner to assess to cover the costs of the Children’s Health Initiative. Without the authority to assess to cover this cost, the legislature has created a current fiscal year deficit of $2,935,769 in the fund.”
Legislative leaders are expected to meet next Wednesday to discuss whether they want to return and reverse some of the spending cuts Malloy made to the budget earlier this week. There’s also the possibility they will be asked to return to approve a deficit mitigation plan.
Senate Republican President Len Fasano, R-North Haven, said Wednesday that the legislature didn’t make a mistake when it drafted the technical changes to the budget.
“For a guy who hasn’t balanced a budget in six years, he sure is Monday-morning quarterbacking a budget we got done without him,” Fasano said.
He said there’s plenty of line items the governor has moved outside the general fund over the years and the legislature was doing something similar by moving this money to the insurance fund.
A spokesman for Senate President Martin Looney, D-New Haven, said Wednesday that they are certainly willing to examine the issue.
At a press conference Tuesday, Looney said legislative leaders planned to speak about all of the suggestions Malloy has made over the past week.
Last week, Malloy announced decisions about what pots of money he planned to hold back as part of the budget and on Monday his budget office announced a $202.8 million deficit.
Looney said he can’t vouch for the accuracy of the deficit projections from Malloy’s budget office, but they will be part of the discussion with legislative leaders.
As for the $91 million in cuts to municipal aid, Looney said it’s an inevitable part of the process that the governor makes a decision and the legislature reacts.
“The budget we passed reflects the area where we had consensus on what to cut,” Looney said. “The default was then left to the unallocated lapses which he is now seeking to address.”
Looney declined to characterize the motivations behind Malloy’s decisions.
The governor’s budget office has projected that the state is already experiencing a $203 million deficit.
On Monday, Fasano accused Malloy of releasing “artificially high numbers” as part of his deficit projections.
“It’s disturbing that Gov. Malloy would purposefully make the state’s finances look worse than they actually are just so he can have a say in how we close the budget shortfall,” Fasano said. “That may be in his best interest, but it certainly isn’t in the state’s best interest.”
Fasano asked state Comptroller Kevin Lembo, who is required to certify the budget deficit on Dec. 4, to confirm the alleged “unbudgeted” adjudicated claims and the additional money the administration said they needed to fulfill a federal court mandate for the Department of Children and Families.
The General Assembly won’t have to return for deficit mitigation if Lembo doesn’t certify a deficit larger than one percent of the general fund.