Bipartisan budget talks place pressure on GOP to find solutions

The most vocal critics of Gov. Dannel P. Malloy’s handling of the state finances, Republican legislative leaders, will find things harder this month as they shift from commenting on the deficit-plagued budget to balancing it.

Sen. Len Fasano and Rep. Themis Klarides will find it particularly difficult to both oppose tax hikes and shield hospitals and social services from cuts if the leaders try to stabilize finances long-term.

That’s because, while the current budget is anywhere from $118 million to $330 million in deficit, finances are on pace to run more than $1 billion in the red in the first new budget after the November 2016 state elections.

And Democratic legislative leaders, who’ve also been the target of GOP jabs, have made it clear Republicans no longer can simply be second-guessers.

“If you have a good-faith discussion with people committed to the process, that means you have to see it all the way through,” Senate President Pro Tem Martin M. Looney, D-New Haven, said Friday. “That means being willing to compromise, to be thorough, and not just to make some points and walk away. It means bringing some votes at the end of the process.”

Though lawmakers from both parties, as well as the Democratic governor, praised the cooperative tone of Monday’s first bipartisan budget session, House Speaker J. Brendan Sharkey, D-Hamden, said afterward he still expects this process to end with Republicans joining Democrats in voting for politically tough choices.

“That means everyone is going to stay at the table if we’re going to do what’s right for the people of the state of Connecticut,” Sharkey said.

Here’s the challenge Republicans face.

The GOP traditionally has refused to vote for tax increases, and that also has been the case since Fasano and Klarides became minority leaders in their respective chambers this year.

But unlike other GOP caucus leaders in recent years, Fasano and Klarides have been vocal advocates for funding for hospitals and for social services.

Fasano has spoken out very strongly against close to $100 million in emergency cuts Malloy ordered in September and aimed largely at hospitals and social services.

Though he told  Capitol reporters that “there will be tough decisions to be made,” the Senate GOP leader said the governor’s decisions in September targeted “the most vulnerable people in our society.”

“We are not happy with the cuts the governor did to hospitals,” Fasano said. “We’re not happy with the cuts the governor did to Medicaid. We’re not happy with the cuts the governor did to mental health. We’re not happy with the cuts the governor did to” the Department on Developmental Disabilities. “We think we need to undo all of those things.”

Restoring funding in those areas — while also avoiding tax hikes — could be done while officials close this year’s deficit, which still represents, at most, not even 2 percent of the general fund.

But Republicans also join Malloy in calling for the new bipartisan budget talks to think long-term as well, and try to chop into the much larger deficit looming after the next election.

To do that, Fasano said, would require “a real restructuring of government” with savings that roll out into future years.

“We want to take this budget apart, and make changes that will roll out into the future to make it a better Connecticut,” Fasano told WTIC-AM morning talk show host Ray Dunway last week. “We’re not going in to fix this one problem. We’re going to do structural changes.”

Given those parameters, Republicans probably would need the governor to secure big concessions from employee unions, traditionally one of the ways to cut deepest into state spending at any one time. But it also is extremely sensitive politically, especially for Democratic legislators about two months away from a re-election year.

Fasano tried to downplay the importance of concessions during his appearance on WTIC-AM last week.

“I don’t think that’s the sole issue for Republicans,” he said.

Over the past year, GOP lawmakers have pointed to other areas that could drive down state spending — but all of them have their challenges.

For example, these include scrapping or reducing recently authorized major increases in transportation funding and municipal aid, both of which don’t kick in with large numbers until after the next state election.

But the former is the single-biggest initiative of Malloy’s second term. And the Democratic majorities in the House and Senate already have begun to campaign on the municipal aid initiative, which they insist will ease property tax burdens, especially in the cities.

Business studies in recent years suggest state government could secure big savings by improving technology to deliver services and by shifting more social services to the private sector. But those studies also project those changes could take years to implement before they deliver big savings.

Republicans also have argued in the past that the state can cut labor costs significantly — as much as $140 million per year — by tightening agency use of overtime. But both the Malloy administration and the unions dispute this, noting that the general fund has about 10,000 fewer full-time positions now than it did when Malloy took office in 2011.

The unions in particular argue that inadequate staffing in key agencies drives up the overtime costs.

And when Republicans proposed their own two-year budget last April, one of their chief initiatives to avoid deep cuts to social services and hospitals involved saving about $300 million per year from a wage freeze and from other worker concessions.

Democratic leaders insisted that Fasano’s cautious statements about labor concessions already show the difference between critiquing the budget process and trying to balance the books.

And while Fasano and Klarides attacked the $1.3 billion tax increase majority Democrats approved in June when they enacted the two-year budget that now is facing problems, Democratic leaders said the hospital funding and social services Republicans are defending would have been slashed long ago were it not for those tax hikes.

“The Republicans, in defending the social services cuts, are really in effect embracing the choices made in the budget to fund those services,” Looney said.

“These are the things we fought to restore in the first budget, fought with the governor to restore,” Sharkey said.

Fasano declined to predict Monday what the finished product would look like when asked how the bipartisan talks would end,

“You never know what’s going to happen in negotiations,” he said. “Republican, Democrat, governor we want to put the state back on track. The idea is we want to bring all of the ideas to the table, share them, and see what we can find as common ground. We are committed to trying to find that common ground.”