HARTFORD – State Representatives Gail Lavielle (R-143), Fred Wilms (R-142), and Terrie Wood (R-141) have joined the House Republican caucus in presenting a revised no-tax increase budget for 2018-19 that eliminates the projected $5 billion budget deficit, increases school funding for all towns, reduces the corporate surcharge, and mitigates municipal aid losses by reallocating funds.
The revisions were necessary because of severely declining tax receipts and revenue projections updated in April that predict a shortfall of $1.46 billion, which means the projected deficit for the 2018-2019 biennium now exceeds $5 billion. Additionally, Connecticut is slated to finish the current fiscal year, which ends on June 30, with a deficit for the third year in a row. That deficit is $390 million.
Shortly before the release of the revised House Republican budget, Governor Malloy announced on Monday an update to the controversial plan he had proposed in February. In his revised proposal, the governor recommends more than $700 million in cuts to municipal aid to help compensate for the precipitous decline in income tax receipts, as well as about $80 million in annual tax hikes in addition to the $600 million he included in his February proposal
“The governor’s revised budget proposal is still unacceptable for towns and taxpayers,” said Rep. Lavielle. “It still includes the provision to transfer the cost of teacher pensions onto municipalities. When he first suggested this back in February I warned that this was only a change in the taxing authority and will in no way reduce taxes. In fact, it would require property tax increases because municipalities would be forced to raise the revenue to afford their new obligations. Our budget does not require towns and cities to make any contributions to the teacher pension fund, it conscientiously avoids any cuts to education, and it preserves special education funding for all school districts.”
“Under our plan, total municipal aid to Norwalk would be protected, and Norwalk Hospital would not be subject to property taxes,” said Rep. Wilms. “Additionally, our budget pushes teacher pension costs back to the state.”
“The budgets put forth by Governor Malloy and our Democrat colleagues are balanced by deep cuts to our towns, local education and hospitals,” said Rep. Wood. “There is another way to do it, and our adjusted budget proposal demonstrates that clearly by closing the budget deficit, restoring funding to our towns and local education budgets, all without increasing taxes. It’s a great starting point for negotiations this week.”
In the House Republican budget proposal, every town will see stable school funding. House Republicans relied on significant state employee union concessions and reduced state spending to balance the budget. They also included a wage freeze for state employees, but no layoffs.
The revised House Republican proposal also includes a range of reductions in state spending and significant state employee union concessions. There is a wage freeze for state employees, but no layoffs.
“The House Republican budget approaches fiscal policy in a way that benefits taxpayers instead of special interests and state bureaucracy,” said Rep. Lavielle. “We ask for specific concessions for unions that align pension and healthcare benefits more closely with those of employees in most other states and with those of private sector employees.”
Among the measures in the proposal that would reduce state labor costs are raising retirement contributions, increasing co-pays for healthcare, and omitting overtime from pension calculations.