Malloy budget chief defends spending plan for education reform

Hartford - Gov. Dannel P. Malloy received strong praise this week from many lawmakers and school advocates for his new budget adjustment plan that boosts education spending without raising taxes or creating a deficit.

Malloy's proposal devotes $128 million to education reforms, and more for shoring up the state employee pension system and social safety net, making a total of $329 million in new spending beginning July 1. The governor also would expand Shore Line East weekend service between New London and New Haven.

Yet a close look at the Malloy administration's longer-term projections raises questions about just how sustainable all that additional spending will be.

Shortly after the spending takes effect, Malloy's fiscal stewards anticipate the daunting task of cutting nearly twice that amount to balance the following year's budget, set to begin in the summer of 2013.

According to the administration's numbers, at least $650 million in spending must be slashed from the 2013-14 budget to stay under the state's constitutional spending cap. How and where that cutting would occur, the projections do not say.

On Thursday, Ben Barnes, the governor's budget chief, strongly disputed any suggestion that the state later will need to pare back the new funding it is offering school districts.

"We believe that the major initiatives we have are sustainable and we'll continue to be able to support them," Barnes, secretary of the Office of Policy and Management, told The Day.

Barnes did not dispute the spending-cap problem, but said he thinks the number - $650 million - is overstated, as it includes some spending that isn't likely to happen. He also didn't disagree that a straightforward counting of projected revenues and expenses could mean $423 million in red ink at the start of the next biennial budget - Malloy's third year in office.

"I can't deny that in the future things may take a turn for the worse," he said.

But Barnes emphasized that every long-term budget projection since at least 2003 forecast spending-cap problems ahead. Somehow, those past administrations made the numbers work.

"We will have to make those reductions," Barnes said of the spending cap. "Just as the General Assembly and the governor managed to make them for the last decade, we'll keep doing it."

A few Republican legislators have voiced concerns about the issue.

"Something's got to give," Senate Minority Leader John McKinney, R-Fairfield, said Wednesday after Malloy's State of the State address. "Whether they try to change the definition of the spending cap or significantly reduce spending - the latter obviously would be preferable."

What's more, Barnes could find himself back in budget-cutting mode before 2013.

The legislature's nonpartisan Office of Fiscal Analysis recently warned that the current year's budget is running a deficit that could exceed $100 million by June 30. Barnes' office sees the numbers differently, projecting a wafer-thin $1.4 million surplus largely as a result of the emergency cuts Malloy enacted last month by executive order.

The budget chief told skeptical Republican legislators on Thursday that if the budget happens to careen back into the red this year, additional emergency cuts would follow.

"That's the way government works," Barnes said later. "And in any business, or any family for that matter, you make your decisions for the current week or year based on the resources that are available to you. And you may have to make difficult decisions."

j.reindl@theday.com