- Associated Press - Thursday, April 27, 2017

HARTFORD, Conn. (AP) - Connecticut lawmakers made small progress Thursday toward reaching a possible agreement on a new two-year state budget, but it was clear partisan differences still remain and a final deal on a challenging tax-and-spending plan is not in sight.

The General Assembly’s Finance Revenue and Bonding Committee unanimously approved a revenue package Thursday that both Democratic and Republican lawmakers said includes no tax increases. The bill, which Rep. Jason Rojas, D-East Hartford, described as “a rather limited revenue package,” will become part of the basis for upcoming negotiations between legislative leaders and Democratic Gov. Dannel P. Malloy.

“It really serves as a starting point for the month ahead,” Rojas said.

Despite the bipartisan goodwill on the committee, it was clear Thursday that bad feelings remain between Democratic and Republican leaders. Also, the state’s revenue picture continues to worsen, making the task of reaching a bipartisan budget deal more difficult.

Malloy’s budget director on Thursday warned agency heads the revenue shortfall for the current fiscal year, which ends June 30, could exceed the state’s Budget Reserve Fund of $235 million. Ben Barnes said the state needs to “prepare for layoffs” in case a balanced budget deal or labor concessions deal isn’t reached. Barnes said all vacant Executive Branch positions “are hereby abolished” and requests to create or refill jobs won’t be granted. He said there also are strict restrictions on agency spending.

The new fiscal year that begins July 1 is projected to have a $1.7 billion deficit, a figure that could change in the coming days as new revenue estimates come in. The state’s main spending account is typically about $18 billion.

Meanwhile, Republican and Democratic legislative leaders exchanged barbs Thursday over the GOP’s alternative, two-year $40.3 billion budget proposal. Senate and House Republican leaders contend their new “Confident Connecticut” plan does not rely on tax increases to balance the state budget. But Senate Majority Leader Bob Duff, D-Norwalk, called the proposal “half-baked,” claiming it would ultimately increase local car and property taxes.

“Buyers beware. The Republican budget raises lots of taxes, despite their rhetoric,” Duff said.

Senate Republican Leader Len Fasano took issue with Duff’s comments, saying, “enough is enough, get to work.” The Republican plan eliminates the state’s Municipal Sharing Account program, which divvied up a small portion of the state sales tax between cities and towns. The GOP proposal instead reformulates state aid to cities and towns by creating a new education funding formula.

The Republican proposal also scraps some of Malloy’s more contentious ideas, including plans to require cities and towns to cover a third of teacher pension costs and allow cities and towns to tax local hospitals.

The Republican budget comes days after Democrats halted action on a spending bill, blaming the lack of GOP support. Republicans said they hadn’t committed to the legislation and always planned to issue their own budget.

Malloy has invited the two sides to meet with him next week to work on the budget.

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