For the second consecutive year, the legislature’s Appropriations Committee will not recommend a new budget before its deadline.
But Democratic and Republican leaders from the House and Senate said lawmakers will continue working between now and the session’s end on May 9 to close a projected shortfall in the fiscal year that begins July 1.
House Speaker Joe Aresimowicz, D-Berlin; House Minority Leader Themis Klarides, R-Derby; Senate President Pro Tem Martin M. Looney, D-New Haven; and Senate Republican leader Len Fasano of North Haven announced the development in a joint statement.
“Last year, Democrats and Republicans worked together to adopt a truly bipartisan budget,” the lawmakers wrote. “As the leaders of our respective caucuses, we are committed to continuing that bipartisan approach. All four caucuses have agreed to continue bipartisan work on the state budget beyond the scheduled … Appropriations Committee deadline.”
Democrats hold a slim 27-25 edge on the committee, and sources from both parties say the panel struggled for weeks to devise a plan to balance finances in the 2018-19 fiscal year.
Analysts say the preliminary $20.66 billion budget for 2018-19 that was adopted in special session last October includes a General Fund that is anywhere from $165 million to $260 million out of balance.
“While it’s disappointing that we do not yet have a legislative proposal for addressing the deficit in their bipartisan budget, we’re glad that all leaders are committed to continuing to work toward that goal, and we will reserve judgment until we see an actual proposal,” said Kelly Donnelly, spokeswoman for Gov. Dannel P. Malloy.
The governor has expressed disappointment in recent weeks that lawmakers also have made no progress in eliminating a nearly $200 million deficit in the current fiscal year, which ends June 30. Malloy first notified lawmakers of that problem on Nov. 20 and submitted a plan to close that gap in early December.
“For our part, the administration has put forward both a deficit-mitigation plan as well as a fully-balanced budget for the legislature’s consideration,” Donnelly added. “Our commissioners and their staff have worked to answer all questions from the Appropriations Committee to assist them in their process. We hope to see the result of this legislative process in the near future, and that the current deficit in the legislature’s budget can be addressed before this legislative session ends.”
Some legislators from both parties want to make other changes to next fiscal year’s budget that would widen the projected deficit in 2018-19 even further.
One of those changes involves mitigating or suspending entirely new restrictions on the Medicare Savings Program. Those restrictions, which could limit prescription medication benefits for as many as 113,000 poor seniors and the disabled, originally were scheduled to start in January, but then were deferred to July 1.
To suspend those restrictions entirely in the coming fiscal year — which would help incumbents from both parties campaigning for re-election this fall — would cost an extra $93 million.
Legislators also want to reduce the amount of savings they directed Malloy to find once the budget is in force.
Malloy, who was ordered to achieve unprecedented savings this fiscal year — and would have to find even more under the preliminary budget for 2018-19 — frustrated lawmakers by withholding $91 million in municipal aid.
Still, contractual obligations and other factors actually left the governor little flexibility to do anything else and still meet the legislature’s directive.
Many legislators from both parties have said they are reluctant to endorse any plan that would require them to raise taxes in the coming fiscal year. That was one of the chief problems that tripped up the Appropriations Committee last year when it failed to recommend a budget.
Lawmakers generally are particularly sensitive to ordering tax hikes in a state election year, such as 2018. And many say that sensitivity has been heightened given the partisan split in the legislature now.
Democrats have a slim 80-71 edge in the House while the Senate is split evenly, 18-18.
In their joint statement, caucus leaders attributed the committee’s decision not to adopt a budget this year, in part, to “multiple weather-related closings” that interfered with meetings.
Sources said Democrats and Republicans could not agree on how to find the resources to mitigate or eliminate the planned cutbacks to the Medicare Savings Plan. Also, both parties are hopeful, sources say, that state analysts will increase revenue projections for the next fiscal year after they complete an April 30 analysis of state income taxes and other receipts.
Technically, the panel will meet Thursday and adopt a “placeholder” budget bill — essentially a measure with a title only and no specific budget details.