HARTFORD, CT — Legislative leaders will meet Wednesday with Gov. Dannel P. Malloy in what could be an awkward conversation over how to handle the current deficit.
It’s the first time since he was elected in 2010 that legislative leaders from both sides of the aisle cut the Democratic governor, who is not running for re-election, out of final budget negotiations and crafted a deal on their own.
Does that mean legislative leaders own the current deficit?
Kelly Donnelly, a spokeswoman for Malloy, believes so.
“When are you going to take responsibility for your own actions, and your own budget?” Donnelly asked lawmakers in a statement last week.
State Comptroller Kevin Lembo said Friday that the state is expected to end the year with a $207.8 million deficit. That’s more than 1 percent of the general fund, which requires the governor to draft a deficit mitigation plan for the General Assembly to adopt.
Senate Republican President Len Fasano, R-North Haven, had previously questioned the deficit numbers released by Malloy’s budget office on Nov. 20.
He said they were making the deficit look bigger than it was and accused Malloy of releasing “artificially high numbers to trigger the need for a formal deficit mitigation plan.”
However, less than two weeks after making that statement Lembo found the deficit was $5 million higher than the governor’s office.
According to Lembo, a significant chunk of the deficit is related to a deficiency in the “non-appropriated Adjudicated Claims account.” That’s the account responsible for paying claims from the SEBAC v. Rowland decision and related attorney fees, along with other negotiated settlements. Rowland’s decision to lay off 2,800 unionized state workers in 2002 was eventually ruled to have been a violation of their contract, and the resulting $100 million settlement is being paid out as claims come in.
With seven months to go in the fiscal year, that account has already paid out over $12.5 million, an average of over $2.5 million a month.
Fasano said even though they disagree on the shortfall, “it’s clear that any budget, including the one Gov. Malloy negotiated, would be in deficit today.”
He argued that since Malloy included the same amount of money for adjudicated claims in his budget, that his budget would also be in deficit.
Fasano went even further say that it’s the policies of the last seven years that are the reason the state is facing a deficit.
He doesn’t blame a four-month stalemate, which cost lawmakers valuable time to save money. However, Malloy, whose last two budgets ended with small deficits, has said repeatedly that the joint decisions of previous administrations, legislatures, and labor to opt out of paying actuarily required contributions to the state employee pensions is the primary source of the state’s financial problems.
Rep. Chris Davis, R-Ellington, told Malloy last week that legislative leaders were able to reach a deal because the governor was not part of the negotiations. Malloy pointed out that Davis voted to authorize the bonding for several projects he would end up voting against as a member of the state Bond Commission.
As for taking pride in being able to pass a bipartisan budget, Malloy said, “For anyone to take pride in the fact that they passed a budget four months late is a little bizarre.”
Fasano expressed concern that going forward the governor should avoid “making decisions out of spite” when he puts together the deficit mitigation proposal.
Following the state Bond Commission meeting, Malloy reminded everyone that “the state only has one governor at one time,” and he’s still the governor.
“I intend to do my job. I’m sure the legislature intends to do their job,” Malloy said.
As for the $181.6 million in spending holdbacks the governor’s office already announced, including $91 million in municipal aid, Malloy said the legislature “gave a specific directive to the governor to make cuts they were otherwise unwilling to make. In making those cuts I was doing exactly what I was ordered to do.”
Legislative leaders were unhappy with the decision to cut municipal aid and were considering making to changes if they return for a special session later this month.
No decision has been made yet on whether they will return before the end of the year to restore funding for the Medicare Savings Program, which helps 113,000 elderly and disabled afford their health insurance.