Senate Minority Leader Len Fasano Arielle Levin Becker /
Sen. Len Fasano
Sen. Len Fasano Keith M. Phaneuf / CTMirror File Photo

One of the most vocal critics of Gov. Dannel P. Malloy and Democratic legislators, Senate Minority Leader Len Fasano, discovered recently it’s not so easy to balance a budget without compromising on some of his fiscal principles.

The North Haven Republican disclosed a series of potential adjustments to the GOP alternative budget – changes that include borrowing to cover debt payments, specialized fund sweeps and the postponement of middle class tax relief.

Since the Republican budget was first issued, fiscal analysts have downgraded revenue projections for the next two years, leaving the GOP plan $227 million out of balance.

But Fasano, who has been pressing Democrats to negotiate the next state budget with Republicans, also said these adjustments show Republicans are willing to compromise with Democrats – who have employed these fiscal maneuvers as well.

“It is extraordinarily difficult to balance this budget,” Fasano said Thursday, referring to the $39.5 billion, two-year budget that minority Republicans in the House and Senate proposed on April 24.

While the new biennial plan Democratic legislators negotiated with Malloy raises taxes by $1.5 billion over two years, and cancels close to $500 million in previously approved tax cuts, the GOP plan basically broke even on the revenue front.

It offered $270 million in tax cuts over the next two years, but at the same time it canceled or delayed $243 million.

The principal objection Malloy and Democrats raised against the Republican plan was that it relied on $680 million in savings from labor concessions and wage and hiring freezes. State employee union officials already have said that workers, who granted concessions in 2009 and 2011, aren’t interested in a third round of givebacks now.  That would leave large-scale layoffs as the only option the governor would have to find the labor savings.

Democrats also questioned whether $220 million in overtime savings in the GOP plan was achievable given reductions in the state workforce since Malloy took office.

Fasano this week released a list of potential revenue adjustments his office has researched, but he acknowledged it hasn’t been reviewed by either the Senate or House Republican caucuses.

It cuts more than $20 million from the Community Investment Act, a program that enjoys strong bipartisan support and funds open space and farmland preservation, housing development and various cultural and historical projects. Fasano’s adjustments also include small cuts on the Judicial Branch and on various education programs.

But it also sweeps $24 million from specialized banking and insurance funds — two moves that largely mirror Democratic budget measures — and another $22.6 million from the public financing program for state campaigns.

Almost $84 million in savings would come by delaying restoration of the sales tax exemption on clothing costing less than $50. Scheduled under current law to resume on July 1, it would be postponed to Jan. 1, 2017, under Fasano’s list of potential changes.

And $50 million in funds to cover debt payments would be cut under Fasano’s adjustments. In its place, the state would use bond premiums – proceeds from funds borrowed at premium rates – to cover these debt service obligations. The GOP budget already relies on $68 million in bond premiums.

Fasano and other Republicans have been highly critical of Malloy and Democratic lawmakers for using $325 million in bond premiums in their budget.

“When asked about employing budget-balancing techniques he has criticized in the past, Fasano said, “We are being flexible,” adding that this shows Republicans could compromise with Democrats if invited to budget talks.

“If we are talking about being serious about transparency, I have shown I am willing to share my work,” Fasano said. “At least we had the guts and the forthrightness to stand up.”

Spokesmen for Malloy and for the House and Senate Democratic caucuses declined to comment on Fasano’s proposals.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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