With less than eight hours left in the session, Democratic and Republican legislative leaders announced a deal Wednesday to adjust the next state budget, restoring funds for health care and municipal aid — and dropping a series of proposed collective bargaining changes.
The deal, which leaders expect to be enacted before the midnight adjournment deadline, also includes a 1 percent cost-of-living adjustment in rates for community-based, nonprofit social service agencies.
And while it also dropped a Republican proposal to make extra payments into the cash-starved pension funds for state employees and municipal school teachers, it would leave Connecticut with a projected emergency reserve of more than $1.1 billion after the 2018-19 fiscal year ends.
“I think it’s once again another monumental step for the state of Connecticut,” Senate Republican leader Len Fasano of North Haven, said shortly after 4:30 p.m., recalling another bipartisan agreement lawmakers struck last October to end a state budget debate that had dragged on for nine months.
“What we did in the fall was very very difficult, but to replicate it was also difficult,” said House Speaker Joe Aresimwicz, D-Berlin. “It took compromise on all sides. It took true interest in the state of Connecticut.”
Though full details of the agreement were not available immediately after the announcement, leaders confirmed several key components including:
- Restoration of a significant portion of planned July 1 reductions in the Medicare Savings Program, which helps low-income elderly and disabled patients pay health care premiums and medication costs.
- Reversal of a $12 million cut to the Medicaid-funded health insurance program for poor adults known as Husky A. Advocates say this funding would enable about 13,500 adults from households earning between 155 and 138 percent of the federal poverty level to retain state-sponsored coverage.
- Restoration of a significant portion of the roughly $90 million cut from municipal aid during the current fiscal year. The new budget also will prohibit the governor from reducing municipal grants — even if mandated by legislators to achieve savings after the budget is in force. [But a statewide cap on municipal taxes on motor vehicles will rise from 39 to 45 mills.]
- The transfer of additional resources to the Special Transportation Fund to mitigate the need for rail and transit fare hikes, rail service reductions and and suspension of capital projects later this year. But sources said the extra funding is not sufficient to stabilize the fund and enable a major rebuilding of transportation infrastructure over the next two decades.
The budget “does restore many of the things that we care about, … categories of grave concern for all members” said Senate President Pro Tem Martin M. Looney, D-New Haven.
“We all feel strongly about our positions and our budgets and what our vision for Connecticut is,” said House Minority Leader Themis Klarides, R-Derby.
Republicans made a big concession to Democrats when they withdrew a series of proposed changes to collective bargaining laws.
These included:
- Ending collective bargaining for retirement benefits after the current contract expires in mid-2027, leaving all of these matters to be resolved solely by the legislature.
- Removing overtime from pension calculations.
- Suspending cost-of-living adjustments to pensions for retirees who become vested after mid-2027 until the system holds enough assets to cover 80 percent of pension obligations. The funded ratio currently stands at less than 40 percent.
“We’re not going to let that be the deal-breaker” Fasano said, but added that Republicans still feel strongly about these issued.
Klarides said the new budget includes other provisions, though, that promote other structural fiscal reforms Republicans have sought.
These involve analyses of several key proposals from the state Commission on Fiscal Stability and Economic Growth, including a possible rebalancing of state taxes to reduce reliance on the income tax and draw more revenue from sales and corporation levies.