Gov. Dannel P. Malloy understands the state budget he’s about to present won’t be popular given the across-the-board tax increases on pedicures to paychecks, yet the new Democratic governor maintains that his proposal is what Connecticut needs to solve its fiscal woes, The Associated Press reports. Â
“What we’ve crafted here and what I would recommend to the legislature here . is a way to undo over time some of the damage which has been done (to the state),” Malloy said Tuesday, a day before his scheduled address to the General Assembly.
Malloy is already fielding criticism about the tax increases he’s proposing — $1.5 billion in the first year of the two-year budget. The minority Republican legislative leaders said they were disappointed that Malloy did not propose more spending cuts, agency consolidations or the selling of some state assets before he turned to taxpayers to help cover a deficit estimated between $3.2 billion and $3.7 billion.
House Minority Leader Lawrence Cafero Jr., R-Norwalk, said he’s concerned that overall state government spending under the governor’s proposal would climb from $19.3 billion this year to $19.7 billion next fiscal year starting July 1, and up to $20.2 billion in the following fiscal year. Cafero said that won’t sit well with taxpayers, who face proposed increases in the state’s sales, income and gas taxes, as well as an end to sales tax exemptions for numerous services and products such as haircuts and non-prescription drugs.
Malloy’s staff stressed that spending in the general fund — the state’s largest account — is slightly lower than this year. Spending was increased in other accounts for various reasons, including triggering more federal reimbursement.
“The average person out there says, ‘I was told that taxes would be the last resort. Are you telling me that you’ve done everything,'” asked Cafero, who said he’s been deluged with calls from constituents, angry about Malloy’s proposed tax package.
“I think there’s a lot left on the table here in terms of agency consolidations, shrinking the size of government, making it more efficient in savings,” said Senate Minority Leader John McKinney, R-Fairfield. “There’s a lot to be concerned about here.”
Malloy said he understands people don’t like their taxes being raised. He said he doesn’t like it either. Yet, the governor said the increases make more sense than borrowing money to cover the state’s operating costs in deficit times, a practice done in past years.
“Do you think the people of Connecticut believe that we should borrow today to cover operating expenses . and hand that over to somebody else? I don’t believe they believe that either,” Malloy said. “There is no easy decision to this.”
The plan to be presented Wednesday calls for raising taxes by $1.5 billion in the first year, cutting spending by about $800 million and finding savings with the state employees worth $1 billion. Malloy gave no details on what types of savings he’s expecting. However, the budget is not expected to include massive layoffs. Benjamin Barnes, the governor’s budget director, said less than 150 positions will be eliminated. There are about 45,000 full-time state employees.
Asked if the savings from state employees, which are supposed to include some concessions that must be negotiated, are doable, Malloy said the state has little choice.
“We have been on an unsustainable track for a very long period of time and we have, in many ways, in a blitheful fashion, have ignored that reality,” said Malloy, adding how the state needs to do what’s necessary to put Connecticut “in a sustainable mode” with state employees.
Malloy said talks have already begun with state workers, but the State Employee Bargaining Agent Coalition, which includes leaders from 13 state employee unions, said those discussions have not touched on collective bargaining issues.
“State workers have already begun working with the administration to produce savings and efficiencies that don’t damage, and in fact enhance the critical services and public structures needed to turn the economy around,” according to a statement from SEBAC.
Malloy’s aides, in defending the spending levels of the budget, said the governor wanted to offer a budget that sets money aside to begin adhering to new accounting principles that tell a realistic story of the state’s finances, does not defer next year’s payments to the state pension plans, leaves behind a surplus in both years to address other fiscal holes and to satisfy bond rating agencies, and maintains a safety net for the needy.
“He will not shred the safety net. He’s not going to do it,” said Roy Occhiogrosso, the governor’s senior adviser. “That would change the face of Connecticut in a way that would render it unrecognizable.”
