Christine Stuart  / ctnewsjunkie
House Speaker Joe Aresimowicz, Matthew Brockman, Rep. Jason Rojas, Rep. James Albis and House Majority Leader Matt Ritter (Christine Stuart / ctnewsjunkie)

HARTFORD, CT — Legislative leaders believe they have a deal to modify the $19 billion 2019 budget and avoid some of the awful things that would happen if they didn’t.

The biggest hurdle to getting a deal was language that would have reduced collective bargaining rights in the future for state employees. 

The Republican budget proposed eliminating matters of retirement and health care from collective bargaining after the current contract expires on July 1, 2027. They also would eliminate overtime as part of pension calculations. They said doing that now would result in savings of approximately $58.2 million in 2020 and $62.3 million annually every year after that.

Those are non-starters for Democratic lawmakers and Gov. Dannel P. Malloy, who has renegotiated health and pension benefits with state employees twice in his eight years.

Democratic legislative leaders were hesitant to announce a deal had been struck at their 11 a.m. press briefing because they wanted Republican lawmakers to hear it from their legislative leadership first.

Republicans legislative leaders briefed their caucus Wednesday morning.

“I would say we have a structure for an agreement,” House Speaker Joe Aresimowicz, D-Berlin, said.

Aresimowicz said there was a mutual desire to avoid a special session to deal with the state budget.

House Minority Leader Themis Klarides, R-Derby, said they did reach an agreement with the Democrats, which was still being drafted by staff. The first draft of the bipartisan budget deal isn’t expected until around 5 p.m.

Christine Stuart / ctnewsjunkie
House Minority Leader Themis Klarides and Rep. Vincent Candelora (Christine Stuart / ctnewsjunkie)

The session adjourns at midnight.

“I do believe those are important structural changes to move Connecticut forward,” Klarides said of the collective bargaining language. “But I also understand that we don’t have the votes and the moderate caucus has decided to take a pass.”

If the General Assembly fails to adjust the budget seniors on the Medicare Savings Program will lose some of their benefits.

Heading into an election year angering a key voting demographic is not helpful to either party.

Next year’s budget would have also increased Gov. Dannel P. Malloy’s power to cut spending and would have increased the car tax cap to 45 mills.

It also would have put the Special Transportation Fund in danger of insolvency. Without a transfer of the new car taxes, the state would have been unable to go out to Wall Street to borrow for transportation projects. Malloy canceled $4.3 billion in transportation projects until lawmakers are able to put more money into the fund.

Both the Democratic and Republican budgets indexed the volatility cap to free up some additional money as part of their most recent budget proposals, but neither have addressed the bond lock, which is still scheduled to go into effect on May 15, 2018.
They expected to address the issue separately, but it’s the final day of the session and there’s only hours left to get it done.

“There’s a lot of warnings out there about the bond lock,” Aresimowicz said. “It’s going to be something, if it comes together it’s going to come together late and it’s going to be out of necessity.”

Attorney General George Jepsen was asked by Malloy Monday for his opinion on the bond lock two days ago, but said he needed more time.

“Unfortunately, we are not in a position to adequately review and respond to the questions posed within the time frame identified,” Jepsen wrote Monday.

However, he said if the legislature delayed implementation it would give his office time to respond.

It remains to be seen if that will happen before midnight.

Meanwhile, Moody’s Investors Services put out an analysis of Connecticut’s current budget situation Wednesday focused on the unexpected increase in personal income tax collections.

“Personal income taxes are now projected to come in more than $1.3 billion higher than assumed in the enacted budget,” Marcia Van Wagner, vice president and senior credit officer for Moody’s Investors Services, said. “Due to legislation passed last year, nearly all of this amount must be deposited into the state’s budget reserve, bringing it to $1.5 billion or more than 8 percent of general fund revenues. Even if, as is likely, a portion of that deposit is withdrawn to cover this year’s estimated $380 million budget gap, the rainy day fund balance would be at the highest level since the financial crisis.”

But Van Wagner warned that it provides “some breathing room for the state but is hardly a panacea for its fiscal troubles.”

Pre-Session Q&A with Democratic House leaders 5/9/18

Last pre-session Q&A with Joe and Matt show until next session

Posted by on Wednesday, May 9, 2018