HARTFORD, CT — Despite some good fiscal news about one part of the income tax exceeding expectations by $900 million, Gov. Dannel P. Malloy warned that he might still veto the General Assembly’s plan to restore health benefits for the elderly and disabled.
Shortly before the House voted 130-3 and the Senate voted 32-1 in favor of a bill to restore Medicare benefits, Malloy said the budget that was passed requires the additional revenue to be placed in the Rainy Day fund, so it doesn’t get the state out of deficit.
“We’re in the enviable position of being ahead of where we were two weeks ago, but the true meaning of that will not be fully understood,” Malloy said.
He said they don’t know yet whether the revenue they received before Jan. 1, 2018, would have come into the state at a later date and how much of it is one-time revenue.
“I would hope having drawn their attention to some of the mistakes that were made in their plan,” that the legislature would be “capable of addressing those,” Malloy said.
That didn’t happen. The legislature passed the legislation they negotiated without the governor.
Malloy said the $54 million the legislature found to cover benefits for the Medicare Savings Program, including the teachers’ pension system, was “double counted” and “wishful thinking.”
House Speaker Joe Aresimowciz, D- Berlin, said after the vote that it “is not our belief” that the legislation passed counts the same monies twice.
The House and Senate acted on legislation that found $54 million in savings to continue to support the more than 100,000 elderly and disabled who use the program.
According to the fiscal note, $19.4 million in savings would come from the teacher’s retirement account, another $10 million would come from a reduction in “other expenses,” about $6 million would come from savings related to state managers and consultants, and $1.34 million from the consolidation of human resource functions in the Department of Administrative Services. The last $17.3 million would come from a transfer to the 2019 budget. The changes will restore the Medicare Savings Program for 2018, but not 2019.
While Aresimowicz called the $900 million announcement by Malloy “good news,” House Minority Leader Themis Klarides, R-Derby, said: “I believe it is not good news or bad news — we are seeing it (money) sooner.”
But both Aresimowciz and Klarides insisted the additional funding had nothing to do with the overwhelming vote in favor of saving benefits for the elderly.
In the Senate, Sen. Mae Flexer, D-Killingly, said she was “grateful to the seniors who came forward” to alert legislators in the House and Senate to the urgency of restoring the funding.
“I really appreciate the one grandmother,” Flexer said, “who said she wouldn’t be able to buy Christmas presents for her grandchild” because she wouldn’t have enough money after picking up the additional benefit costs.
The program helps more than 113,000 seniors and disabled individuals who qualify for Medicare purchase their Medicare Part B benefits.
But the decision to restore funding for the elderly and disabled wasn’t clear cut for some lawmakers given the current budget situation.
Sen. Gary Winfield, D-New Haven, the only senator to vote against the bill, acknowledged that he expected to hear about the vote from seniors in his district.
“I want a fix but when I think about money coming out of the teacher retirement system, I have a problem with that,” Winfield said. He added he wasn’t convinced there was a $6 million savings to be realized in the manager and consultant account.
Right after the Senate vote, Senate Republican Leader Len Fasano, R-North Haven, said he is hoping that Malloy won’t follow through on his threat to veto the legislation.
“Hopefully he’d see the overwhelming vote,” Fasano said, adding that it would “seem silly” to bring the House and Senate back for a vote that would clearly easily override a Malloy veto.
Amy Orlando, president of the Connecticut Chapter of the National Academy of Elder Law Attorneys, said she hopes that Malloy reconsiders.
“This is a critically important issue and we thank lawmakers for acting so quickly to correct it,” Orlando said. “We are now hopeful Governor Malloy will sign this legislation and give seniors and disabled residents the peace of mind they deserve in knowing they will be able to afford their ongoing health care coverage; seniors will be looking for this relief to be extended into the next fiscal year to ensure that this program is protected for the long-term.”
Senate President Martin Looney, D-New Haven, said he didn’t believe there would be time for a special session on the budget deficit before the start of the next General Assembly session the first week of February.
Looney noted that legislators would need to not only have firm income tax numbers but also sales tax receipts from the close of 2017, which he said wouldn’t likely be available till a few days before the start of the next session.
At a press conference announcing the $900 million in additional funding right before the House vote, Malloy conceded “some portion (of the $900 million) would have been paid later.”
Malloy said that “hundreds of millions worth of the increased collections are attributable to taxpayer efforts to accelerate tax payments that would normally be paid early in 2018 into calendar year 2017 in order to take advantage of the federal tax deduction that became capped on Jan. 1st, 2018.
The governor said it won’t be “until more time passes,” specifically when the federal tax deadline of April 15 comes and goes, before the state truly knows where it stands on tax receipts.
Regardless of what happens with the tax receipts, the legislature passed the Medicare Savings Program bill with a veto-proof majority.
Democratic and Republican legislative leaders are working on deficit mitigation plans. They are hoping to reach a bipartisan agreement on their respective proposals as they wait for the revenue estimates to be revised on Jan. 16.
State Comptroller Kevin Lembo estimated that the 2018 deficit, as of Jan. 2, was $224 million.
Gov. Malloy discusses higher-than-expected income tax collections for December and January with reporters
Posted by CTNewsJunkie.com on Monday, January 8, 2018