(UPDATED w/chart :9:30 a.m.) HARTFORD, CT — Legislative leaders maintained their optimism that they will be able to put forward a bipartisan spending package this week to address a $165-million deficit looming in 2019.
There’s also an estimated $162 million deficit for 2018, but the only spending package that is due this week is for 2019.
If revenue estimates hold and they decide not to adjust the second year of the budget, then they’re looking at a $327 million deficit this year and next.
Sen. Cathy Osten, D-Sprague, who co-chairs the Appropriations Committee, said Friday that the three chairs of the committee are working on a bipartisan spending package and expect to vote on it this week. Their deadline is Thursday, April 5.
Last year, the Appropriations Committee wasn’t able to even vote on a package because neither party could agree on one. The process was so strained that it look until October for the legislature to approve a two-year budget.
This year, they can adjust the second year of the budget, but they don’t have to. They could leave a deficit for a new governor and General Assembly.
“We might make some dents, but I’ll admit it might be difficult to get the full amount,” House Majority Leader Matt Ritter, D-Hartford, said last week referring to the 2019 deficit.
If they don’t make progress closing these deficits now, it means the next governor could inherit a deficit that’s more than $5 billion over the first three years of the new administration from 2019 through 2021.
In February, Gov. Malloy proposed closing the 2019 budget deficit with $234.6 million in revenue increases. He also proposed $65.4 million in spending increases within that revision for a net gain of $169.2 million.
However, that doesn’t include a restoration of $130 million for the Medicaid Savings Program, which the legislature left out of the budget last year. If nothing else is done the next governor is looking at an estimated two-year deficit of about $2.34 billion.
Osten said the Appropriations Committee package, as of last Friday, included funding for the Medicaid Savings Program.
It’s unclear where a spending package might leave the state because the Finance, Revenue and Bonding Committee won’t have all the revenue figures until the last few weeks of April.
Senate President Martin Looney, D-New Haven, said they’ll have to wait until after the April 15 tax returns are counted to see where they stand, but he would like to see the General Assembly resolve both the 2018 and the 2019 deficits before adjourning on May 9 to run for re-election.
Looney said there’s the possibility for enhanced sales tax collections depending on the outcome of a Supreme Court case that would require online retailers to collect sales taxes even if they don’t have a physical presence in a state. There’s also the possibility of sports betting and recreational marijuana bringing additional revenue to the state, he added.
“I don’t think anyone is interested in a special session this year because obviously this is an election year for everyone,” Looney said.
Senate Republican President Len Fasano, R-North Haven, said the legislature “should” adjust the 2019 budget. But he said he thinks they first have to erase the deficit for 2018.
“We need to get the job done now,” Fasano said. “Once we balance 2018, we have to balance 2019.”
Fasano said the 2019 deficit is actually probably closer to $300 million given all the cuts and holdbacks that were in the 2018 budget.
“It’s a difficult task,” Fasano said.
House Minority Leader Themis Klarides, R-Derby, said Republicans have every intention of addressing the deficit before adjourning to seek re-election.
She said they are hoping to do it on a bipartisan basis, but it remains to be seen if that will happen.
“We believe our budgets and vision is what will move the state of Connecticut forward,” Klarides said. “We are going to continue to do that.”
Looney said there’s a reluctance to raise any of the standard taxes, but there’s a possibility collections in some of the categories will be favorable.