April 26, 2016

Zupkus: Legislative Update

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There is a popular saying that the definition of insanity is doing the same thing over and over again, and expecting different results. As I discussed in last month’s legislative update, the legislature’s majority party continues to function in a quarterly cycle of state budget deficits and Band-Aid mitigation plans to close the gap. It is abundantly clear that this approach to state government is not only failing, it is pushing the state farther into fiscal crisis with every month that passes.

Since my last update, the legislature met at the end of March and voted on a mitigation plan to close the $220 million deficit in the fiscal year 2016 budget. That plan restored $31 million to hospitals, prevented cuts to municipalities, and avoided deep cuts to social services. As I had warned last month, tax revenues were lower than expected, which immediately put the 2016 budget (just balanced two weeks prior) back in the red and a new, $141 million deficit was announced.

Also during this time, the legislature’s Appropriations committee presented their budget for fiscal year 2017 (FY17), which begins July 1 and is $937 million in deficit. The proposed Appropriations committee budget only addressed little more than half of the deficit, leaving $300 million out of balance, and cut Education Cost Sharing (ECS) grants to towns and cities. ECS funding subsidizes our local public schools.

In an unprecedented move, one week following the release of the Appropriations committee budget, the governor submitted a second budget which would close the $937 million deficit at the expense of large cuts to social services and hospitals, and massive cuts to ECS grant funding. In fact, 23 towns would lose millions of dollars for education funding and completely eliminate the grants under the governor’s budget. Under both the governor’s budget and the Appropriations committee budget, Prospect, Cheshire, and Bethany would lose education funding and feel the negative impact of these cuts, should either proposal move forward through the legislative process. I do not support either budget proposal that reduces funding for education.

This morning, I joined my fellow Republican colleagues in the legislature in supporting our “Pathway to Sustainability” plan, which sets Connecticut on a five-year path toward fiscal stability. The plan, which has been vetted by the legislature’s non-partisan Office of Fiscal Analysis, closes the $935 million 2017 budget deficit without raising taxes, cutting aid to cities and towns, or local education funding or using the Rainy Day Fund, and results in a $600 million surplus by 2021.

The proposed Republican budget would restore funding to core social services Democrats have proposed cutting this year, while also making needed cuts and implementing new policies that generate long-term savings. This includes the following:

Restores education funding for towns and increases statutory grants to municipalities. Also preserves funding at 100% for car tax capping and implements a robust municipal mandate relief package. Maintains funding throughout the next 5 years.

Protects funding for social services. In order to preserve the safety net of services for the disabled, those with mental health needs, children, the elderly and those in poverty; this proposal eliminates new proposed budget cuts to direct services.

Restoration of support for hospitals and Medicaid reimbursements.

Administrative reductions. To enable the state to protect funding for core services, this budget cuts specific, non-service accounts by 12% for a total savings of $157.5 million.

Legislative givebacks including legislative salary reductions and elimination of unsolicited mail.

Modifications to debt service and a cap on state bonding.

Funds transportation development with “Prioritize Progress” – a no tolls/ no tax increases plan.

Implements long-term structural changes to the state budget including mandatory voting by the legislature on labor contracts, overtime accountability protocols, as well as caps on spending and bonding, and many more, detailed in the attached document.

Prices out savings from changes to unionized state employee health and pension benefits, to offer an alternative to layoffs should unions come to the negotiation table.

A full line-by-line and detailed summary of the plan can be found at, www.fiveyearbudget.com. The legislative session ends May 4, and I look forward to updating you about what transpires.