Panel wants $10M added to state budget

Hartford - The legislature's Appropriations Committee is proposing a biennial budget that would spend $10 million more than the governor proposed for fiscal year 2014 and $38 million more in fiscal year 2015.

The budget - which proposes spending $21.5 billion in fiscal year 2014 and $22.4 billion in 2015 - passed by a 32-17 vote in committee, with four people absent. It next goes before the full House.

Committee co-chairman and state Rep. Toni Walker, D-New Haven, said there was bipartisan support for portions of the proposed budget. But Senate Minority Leader John McKinney and House Minority Leader Larry Cafero, R-Norwalk, disagreed.

"If you want to have us in the room, we will put ideas on the table," McKinney, R-Fairfield, said. "If you don't, then man up and admit that this is a Democrat budget."

McKinney and Cafero said the budget does not cut spending enough and relies too heavily on borrowing. The Finance, Revenue and Bonding Committee passed a bill Friday that would increase borrowing, put off paying some of the state's debt service and raise the gross receipt tax at the gas pump, to 8.1 percent from 7 percent.

House Speaker Brendan Sharkey, D-Hamden, said Friday the Republican leaders were marginalizing themselves and their caucus.

"Whenever there is a difficult budget, the political tendency is to run away to the sidelines and not have to make the hard decisions that have to be made," Sharkey said.

Spending and cuts

Appropriations Committee co-chairman and state Sen. Toni Harp, D-New Haven, said the 2011 State Employees Bargaining Agent Coalition agreement is responsible for one of the largest required expenditures: salary increases and funding of the state employees' and teachers' retirement funds.

"These are a lot of the things that bind us and limit the way we spend dollars," Harp said.

McKinney said the budget serves the "government class" by increasing the salaries of state employees and not getting enough savings from the union contracts.

In the aftermath of the Sandy Hook tragedy, Walker said, the budget includes $10 million in 2014 and $6.4 million in 2015 to improve mental health services. An additional $9.1 million is allocated in each fiscal year for Newtown-related programs, Walker said.

The committee proposes spending $15.6 million more on school-based health clinics over the next two years than the governor did.

The committee also proposes $142 million in grants for mental health services, as opposed to $108 million, as the governor proposed.

Mental health providers had told committee members that the timetables for getting patients covered under the Affordable Care Act were unrealistic and that defunding their programs would cause people to go to hospitals, which are also facing funding cuts, said state Rep. Patricia Dillon, D-New Haven.

The committee decided to take the Education Committee's recommendation to restore the Payment in Lieu of Taxes on state-owned property but cut PILOT by $11 million, which means $64 million would be available annually.

The committee also re-established the so-called Pequot and Mohegan Fund, funded by slot machine revenues, but reduced it by $11 million, to about $51 million in both fiscal years.

The committee kept the governor's proposal to cut hospital funding by about $550 million over the next two years. In the committee's and governor's budgets, the state would reimburse hospitals less for their treatment of uninsured patients, Benjamin Barnes, secretary of the Office of Policy and Management, said last month. Once more provisions of the Affordable Care Act go into effect on Jan. 1, more people who were uninsured are expected to qualify for Medicaid coverage for treatment at hospitals.

However, hospitals have said they are concerned people will not register quickly enough for Medicaid, leaving hospitals to pick up the costs.

The proposal appropriates $15 million for 11 hospitals that have 64 percent or higher Medicaid and Medicare rates, Walker said. The committee felt it was important to shore up some of the smaller hospitals, which have said they might have to shut down or sell to larger hospitals, Walker said.

Revenues

State Sen. Andrea Stillman, D-Waterford, said the revenue bill was not a perfect bill but that she supported the bill and especially the section that exempted vessels docked in the state for 60 days or less from paying the sales and use tax. This would result in a revenue loss of about $2 million, according to the Office of Fiscal Analysis.

She said she believed this change would bring in more revenues for the state because more people would be staying in hotels and spending money at restaurants.

"That will bring business people back to the state," Stillman said.

The finance committee also proposed letting the energy-generation tax sunset. But the proposal is combined with refinancing the payment for economic recovery notes. The refinancing causes taxpayers to pay $43.8 million more in debt service than they would under the current recovery note payback schedule.

Other taxes that were set to expire won't.

The 20 percent surcharge on the corporation tax would continue for the next two years, and the cap on an insurance premium tax credit would also continue.

The tax on wholesale gasoline and other fuels will increase to 8.1 percent from 7 percent as scheduled. This tax is applied to gas stations but is passed onto consumers. Many Republicans opposed the increase and provided amendments, which failed.

In the committee's bill, the vehicle tax relief would begin in 2018, as opposed to in 2014, as the governor had proposed.

j.somers@theday.com

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