With the General Assembly one week away Tuesday from its latest budget deadline, lawmakers remained gridlocked — along both partisan and policy lines — over how to close a massive projected deficit.
Minority Republicans in the House renewed the pitch for their own budget, a plan that relies on $2 billion in labor savings mandated by statutory changes — and not bargained collectively.
Minority Leader Themis Klarides, R-Derby, vowed that if House Democrats bring their own budget — which includes a sales tax hike — to a vote on Tuesday — the GOP would offer its own proposal as an amendment.
And while all sides say negotiations continue, many said privately that no one has built consensus yet around any plan — let alone one that Gov. Dannel P. Malloy would sign — to close $5.1 billion in projected deficits over this fiscal year and next combined.
“There have been many leader and governor meetings going on over the past few months,” Klarides said. “Clearly they have not born much fruit, or else we wouldn’t be in the middle of July without a budget.”
The challenge of closing deficits ranging from 12 to 14 percent of annual General Fund spending has perplexed state officials for months.
House and Senate Republicans say their Democratic counterparts would raise taxes too much, particularly the House Democrats, who would boost sales and hotel taxes.
Democrats fire back that the GOP relies on proposed labor savings that probably cannot be achieved legally.
Republicans have proposed unilaterally changing benefits and some collective bargaining rules to cut labor costs. The alternative, the GOP says, is to back a concessions deal that Malloy negotiated. But while it reportedly saves $1.57 billion over the next two years, the state would have to extend a costly benefits program for five more years and forfeit its right to lay off workers for four years.
And there’s also disagreement within each party.
Senate Democrats haven’t endorsed the sales tax hike that House Democrats want.
And some House Republicans say a Senate GOP plan to divert to the General Fund dollars utility consumers pay to support conservation programs would amount to a hidden tax hike.
Given the lack of consensus, Klarides said House Republicans wanted to make sure Tuesday their plan received due attention.
“We wanted to at least start the conversation with our colleagues in the building,” she said. “This is not for purposes of debate. This is not an adversarial discussion.”
Besides cutting labor costs by about $2 billion over two years combined, the House Republican budget also would:
- Eliminate a program to share sales tax receipts with cities and towns.
- Preserve and modestly increase funding for local education.
- Ease certain mandates on municipalities.
- Reduce many state agency budgets by as much as 10 percent.
House GOP members also emphasized what is not in their plan, pointing to controversial proposals from others that they have avoided, including:
- Raising the sales tax from 6.35 percent to 6.99 percent and placing a 1 percent surcharge on restaurant bills.
- Legalizing and taxing recreational marijuana use.
- Allowing communities to levy taxes on nonprofit hospitals’ real property.
- Billing communities for $400 million annually to cover a portion of the required contribution to the teachers’ pension fund.
- And sweeping energy and environmental conservation funds.
House Speaker Joe Aresimowicz, D-Berlin, who said majority Democrats still hope to present a new budget for a vote on July 18, said he hasn’t abandoned all hope of a bipartisan deal.
But he also said many Democrats disagree with the GOP approach to reduce labor costs, and also fear the House Republican plan would not protect Connecticut’s neediest citizens and communities.
“Part of the budget process is evaluating things, and maybe accepting things you don’t like to retain the things you do like — balancing municipal aid with (state) taxes or no taxes,” he said.
House Democrats got some support Tuesday from the Connecticut Conference of Municipalities, which also has proposed a sales tax increase to ease pressure on a heavily burdened property tax base.
“We think there’s a lot of good ideas,” from both parties, CCM Executive Director Joe DeLong said. “But we also think that the time for the dueling releases and dueling press conferences is over.”
The new fiscal year began on July 1 absent an approved state budget.
And Malloy, who is running state finances by executive order, has noted that rising debt costs and shrinking tax receipts would leave him no choice but to cut funds for social services and for towns.
“We think it is time for the adults to get in a room together, to negotiate, … and to get the job done,” he said.
DeLong added that most municipal leaders still support a sales tax increase to ease pressure on the property tax base.
Connecticut AFL-CIO President Lori Pelletier noted that unionized state workers began voting last week and continue to cast ballots this week on a concessions plan to close a major portion of the projected deficit.
“They’re voting, still, on giving back $1.5 billion,” she said. “They live in every city, every town, every municipality. They’re your neighbors, your friends, your kids, your parents. They are the ones who’ve already stepped up and said we’re willing to give back.”
Pelletier called the House GOP approach to labor savings “smoke and mirrors.”
“Going after people’s pensions and trying to diminish them, that’s going to hurt workers,” she said.
But House Republicans had their people listening intently to their proposal Tuesday, including four moderate Democrats who sat among the GOP as the budget proposal was discussed.
The four moderates sat in the front row, all potential swing votes on a budget. Three of the four — Jonathan Steinberg of Westport, Danny Rovero of Killingly and John Hampton of Simsbury — voted against the budget last year. The fourth, Liz Linehan of Cheshire, is a freshman.
All four said they were open to budget solutions. None were ready to commit to the GOP alternative, and Linehan said she was skeptical about some of their proposals, including eliminating public financing of campaigns.
Hampton sat with Rep. Melissa Ziobron of East Haddam, ranking GOP representative on the Appropriations Committee, after the presentation, asking questions.
“We’ve got to get moving, working together,” Hampton said.
Ziobron said she saw the four Democrats as legislators open to a fusion budget, if not a GOP version.
“I think there is a good chance” of winning Democratic votes, Ziobron said. “It’s only a handful of votes. I think people appreciate the transparency. I’m going to answer some of John’s questions right now.”
“There are five different budgets out there. My goal is to understand all of them and try to pick out the best. I’m tired of talking about Democrat or Republican budgets It’s time we had a budget for the people of the of state of Connecticut,” Steinberg said.
If there is a vote on the House Republican budget on Tuesday, “I would have to think long and hard before I could vote ‘no’ on that,” Rovero said.