Governor proposes more spending cuts or tax hikes

HARTFORD, Conn. (WTNH) — More spending cuts to social programs for the elderly or several tax hikes have been proposed by Governor Dannel Malloy to address the latest red ink bleeding in the new state budget. The State Comptroller says the budget passed in late October without the governor’s participation is $208 million in the hole already.

The governor has presented lawmakers with a list of options, and as one legislative leader texted Wednesday, they’re all bad.

At the top of the governor’s list of options is closing the historic Old State House in downtown Hartford. That would save about $700,000. He also suggests cuts to community and school based health clinics and grants for substance abuse and mental health services.

It would also include cuts to Medicaid and even the personal needs allowance for those in nursing homes and funding for the home care program.

Related Content: Capitol Report: Connecticut sees another financial crisis at the state Capitol

The alternative would be increasing the sales tax to 6.5 or even seven percent, as well as increasing the restaurant tax to seven percent and the hotel tax to 17 percent. Additionally, the exemption for non-prescription drugs would be repealed. All of these ideas were just rejected by the legislature in October.

He also suggests increasing the cigarette tax another 25 cents to $4.60 a pack, and increasing the real estate conveyance tax to 1.25 or even two percent.

The governor does not have the authority to make any of these spending cuts or tax increases on his own. He’s just required to submit a plan to the legislature because the deficit is now one percent of the new budget.

Republican Senate President Pro tempore, Sen. Len Fasano (R-North Haven) said, “$200 million in taxes, which is what he’s also put on the table is just a non-starter. He just can’t go in that direction.”

Related Content: Hartford hoping for $45 million from new oversight board

Democratic Senate President Pro tempore, Sen. Martin Looney (D-New Haven) stated, “I personally would support many of them, but, obviously, this has to be a negotiation that we have to engage in with the Republican caucuses in the House and the Senate.”

The leaders say they have a plan to address the cuts in the Medicare Savings Program and they want to restore the $91 million in cuts in municipal aid the governor announced last month.

Those two items actually make it a $350 million dollar problem, one that almost assures that lawmakers will be coming back to Hartford early in the New Year.

To read Gov. Malloy’s letter to legislative leaders and the deficit mitigation options, click here.

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