The legislative cooperation that produced last October’s bipartisan state budget deal could face its toughest test starting next week as legislative leaders begin trying to close a deficit and find more funds for health care programs and municipal aid.
State income tax receipts are projected to surge by $900 million in a report due next week. But because of new spending controls in the state budget, legislators can’t use the bulk of that to mitigate a $224 million deficit.
With partisan feuding providing the final push Thursday, the state legislature now will come into session between between Christmas and New Year’s Day to reverse an unpopular cut to a social services program for poor seniors and the disabled.
Gov. Dannel P. Malloy released an array of options to rebalance the state budget Wednesday that include raising the sales tax rate as high as 6.9 percent, boosting other taxes, cutting municipal aid by $50 million and reducing health care, social services, and other programs.
Connecticut’s cash-starved transportation program would need to scrap some rail services, drive up fares, suspend 40 percent of planned capital projects and defer major highway rebuilds like the Hartford Viaduct, to remain solvent over the next five years, Gov. Dannel P. Malloy’s administration has warned Wall Street.
Comptroller Kevin P. Lembo made it official Friday: In a letter to Gov. Dannel P. Malloy, the comptroller says the state is on pace for a $207.8 million deficit that exceeds the one-percent threshold requiring the administration to prepare a deficit-mitigation plan. The Malloy administration made a similar prediction last month.
Connecticut’s long-running battle to adopt a new state budget has left the capital program used to build schools, roads and bridges low on cash.
Gov. Dannel P. Malloy signed a bill Tuesday that makes technical budget revisions he forced through a line-item veto, but he also raised a new complaint: The legislature improperly transferred a $2.9 million children’s health program to an account funded by assessments on the insurance industry.
Gov. Dannel P. Malloy intensified pressure on the legislature Monday to come into special session to repair the new state budget, projecting a $203 million deficit that exceeds a key risk threshold.
Connecticut got a clearer picture of the painful cuts in the new state budget Friday when Gov. Dannel P. Malloy imposed more than $880 million in spending cuts mandated by the General Assembly.
The House of Representatives overwhelmingly gave final approval Wednesday to a measure fixing technical flaws with the hospital tax, a renters’ rebate program and other aspects of the new state budget.
The Senate voted unanimously Tuesday to fix a series of technical issues in the new state budget, including a flaw with the new hospital provider tax increase.
Less than three weeks after legislators approved the new state budget, eroding revenues have opened deficits topping $175 million this fiscal year and nearing $150 million in 2018-19.
A vice president and economist with the Connecticut Business and Industry Association, Peter Gioia has spent the past 18 years with the state’s chief business lobby, managing its research department and tracking Connecticut’s economy through a quarterly survey. In this week’s Sunday Conversation he talks about the recently approved, bipartisan state budget; the long struggle to adopt it, and its impact on Connecticut’s business community.
While the new state budget promises an array of tax cuts two and three years from now, it also leaves the next governor and legislature to close a $4.6 billion projected shortfall — far larger than the deficit lawmakers addressed in the current plan.