HARTFORD, Conn. (AP) — Connecticut lawmakers will make it clear this week how much of Gov. Dannel P. Malloy‘s proposed two-year $40.6 billion budget they are willing to accept.
The General Assembly’s two budget-writing committees will vote on their proposed spending and tax and revenue plans. Already, it is questionable whether legislators — mostly likely fellow Democrats — will include many of the governor’s proposals, especially a plan to shift $400 million of the annual $1.2 billion cost of teacher pensions to cities and towns.
What comes out of the Appropriations and Finance Revenue and Bonding Committees, coupled with an anticipated Republican alternative budget, will be the basis for what are expected to be challenging negotiations between lawmakers and Malloy on a final agreement that covers a projected $1.7 billion deficit.
The legislative session adjourns June 7.
Besides teacher pensions, some potential flashpoints include Malloy’s proposed state employee union givebacks and the General Assembly’s changed political party makeup itself.
While Democratic House Speaker Joe Aresimowicz has held off from saying any idea is dead this session, he acknowledges Malloy’s plan to shift a third of teacher pension costs from the state to cities and towns “is problematic.”
The Connecticut Conference of Municipalities and the Connecticut Education Association have joined forces to fight the governor’s proposal, saying it will lead to higher local property taxes and jeopardize local services to the public — concerns shared by Democratic and Republican rank-and-file lawmakers.
“It’s a third. It’s $400 million. To drop that bill on a municipality in any given year would make it nearly impossible, especially a year where they’re seeing ECS (Education Cost Sharing grant) cuts, special education costs. It would just triple the effect. Essentially we’d be raising taxes by forcing them to raise property taxes, and that’s not where we want to go,” Aresimowicz said.
He noted, however, that municipalities “should have a little skin in the game” when they set teacher salaries, which impact the pension fund.
Malloy’s spokeswoman, Kelly Donnelly, said opposition to the teacher pension cost-sharing idea is “a plea to maintain the status quo and continue to spend money that the state doesn’t have,” something Malloy does not want to do.
In the budget plan he unveiled in February, Malloy assumed potential labor concessions from state employees worth $700 million in the fiscal year beginning July 1 and $869 million in the following fiscal year. It’s questionable whether those givebacks will be possible, or Malloy will ultimately have to issue more layoff notices.
Malloy said Thursday he hopes to reach a possible deal with the state employee unions but noted his administration has been meeting unofficially with union leaders since November and no agreement has been reached.
His budget office has notified collective bargaining units that it developed a “statewide workforce reduction contingency plan,” a step that allows the state to begin issuing layoff notices to more than 1,000 individuals in May, if necessary.
Aresimowicz said he expects the budget-writing committees this week will assume Malloy secures the labor savings. He said if those numbers “don’t come to fruition, we’ll come back and act accordingly.”
Whether or not Malloy can reach a deal, House Minority Leader Themis Klarides said she is more concerned with “what he’s going to give up in return for concessions” and agrees to extend the most recent labor concession agreement for possibly five years.
“That is one of the most dire things that can happen in these negotiations,” she said, adding how it could tie the hands of future legislatures and governors.
The impending budget talks come at an unusual time politically at the state Capitol.
This session, there’s an equal number of Republicans and Democrats in the Senate, while the Democrats hold a slim majority in the House of Representatives. That’s a big change from past years, where Democrats essentially controlled the budget process.
Meanwhile, Malloy recently said he will not seek a third term in 2018. Opinions differ as to whether he gave up some of his political influence on the budget process with that announcement, something Malloy — who still has veto power — denies.
“I don’t think it will matter one way or the other, because currently there’s been a lot of head-butting between the Democrats and the governor for the past several years. I don’t see that changing,” Klarides said. “But we’re all going to fight passionately for the budget we think is best for the state.”