Malloy gives lawmakers two options for temporary budget fix

HARTFORD, Conn. (WTNH) — Governor Dannel Malloy is giving state lawmakers two options to keep state government going on Saturday when the budget year ends. There are severe cuts in programs in both options but time is running out. Legislative Democrats and Republicans are at legislative budget gridlock so the Governor is giving them a push.

Governor Malloy, who announced today that he has signed the concession deal with the state labor unions leaders paving the way for a rank and file vote next month, gave two plans to legislative leaders for running the state starting Saturday.  One is by executive order while the other is a mini budget that would run the state on a quarterly basis that would need a House and Senate vote by Friday. “Both options would cut expenditures drastically in order to keep our state’s finances in balance,” said the Governor.

Related Content: Malloy signs tentative concession deal with state labor unions

Malloy says under an executive order, cities and towns would take a big hit in municipal aid and the education cost sharing formula. “This means that municipal aid will be sharply reduced. Discretionary grants will be zeroed out and E.C.S. grants will be cut by hundreds of millions of dollars,” said Governor Malloy.

Social services would also take a big hit.

“Some of our most vulnerable residents will no longer be able to receive services from D.D.S., or D.M.H.A.S., or the Department of Health,” he said.

If the legislature was to vote for option two, approving his mini budget before Friday would only make things a little better. “This mini budget cuts spending across government but also adopts some revenue changes that were proposed by Democrats and Republicans and allows for a more broad based spending reductions,” Governor Malloy explained.

Democratic leaders said they plan to work with their staff all night to see if the mini budget plan can work.

Rep. Joe Aresimowicz (D-Berlin) the Speaker of the House said,  “We really need to crunch those numbers. We genuinely appreciate the Governor’s efforts I know they worked through the weekend so we want to look at it before we pass judgement.”

For a closer look at the Governor’s two options, you can read the press release in its entirety below:

Governor Dannel P. Malloy today released a detailed “Resource Allocation Plan” for Fiscal Year 2018. The Governor will implement this plan via executive order should the General Assembly fail to adopt any budget for the biennium before July 1, 2017, and is prepared to allocate funding for the first quarter of the fiscal year (July 1 through September 30) this week. The Governor has also released a proposed quarterly “mini budget,” which would require adoption by the legislature. Neither this legislation nor the Resource Allocation Plan would make our deficit worse over the coming months while the legislature arrives at a budget solution. The administration believes that legislative action on the mini budget is the most responsible and preferable alternative, short of adopting a balanced and responsible 2-year budget.

Both options would cut expenditures drastically in order to keep our state’s finances in balance. However, acting solely within executive authority limits the tools available to the Governor, resulting in more drastic, yet needless cuts. The Resource Allocation Plan is based on principles released by the administration last week, and is available here.

Governor Malloy’s mini budget pares spending across government, but also adopts some revenue changes that were proposed by Democrats and Republicans, and allows for more thoughtful reductions in spending. Further, it implements tools that will help municipalities, particularly those that are financially distressed. The mini-budget would avoid some cuts that would otherwise be made to municipal aid, hospitals, and non-profit providers. It would restore funding to summer youth employment programs, the rental assistance program, and honor guards. A comparison between the two plans is available here.

“Connecticut can and will adopt a responsible, balanced budget for the coming biennium – the question is how best to handle our finances until that happens,” said Governor Malloy. “I am prepared to operate government in the absence of a budget, but it has never been my preference to do so. That’s why I’m offering this proposed mini budget to the General Assembly. It is a responsible, short-term option that allows us more time to negotiate a full budget, without making our current problems any worse and without further jeopardizing the state’s bond rating. I urge the General Assembly to take up this mini budget before the week is out.”

“Over the past six years, Governor Malloy and Connecticut lawmakers have done difficult work to align the state budget with revenue and adopt responsible accounting principles,” said Lt. Governor Wyman. “It’s taken decades to develop these systemic budget problems, and it’s going to take more work from all sides to get us back on solid footing. First and foremost, Connecticut residents elected us to fix our budget. It’s with them in mind that I encourage the legislature to come to the table and hammer out a budget.”

In the absence of an enacted budget, the Governor has an obligation to maintain essential services and satisfy obligations that are critical to the functioning of the state, and he may do so by allocating funds under executive authority. The State of Connecticut enters Fiscal Year 2018 with a projected General Fund deficit of more than $2.1 billion, as the economic reality has resulted in more realistic revenue expectations while the state is simultaneously experiencing expansions in fixed costs such as pension contributions and debt service, along with caseload growth in vital human service programs. The administration has consistently argued that we must take immediate steps to address our deficit of more than 15 percent of expenditures or risk making the problem much worse through inaction.

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