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Democrats praise, Republicans pan state budget

By Johanna Somers

Publication: The Day

Published 06/07/2013 12:00 AM
Updated 06/07/2013 04:07 PM

Hartford - In the light of the day after the state General Assembly session ended, Democratic legislators and the governor spoke of their accomplishments and defended their budget decisions in what they called a "tough" budget year.

Meanwhile, House Minority Leader Larry Cafero, R-Norwalk, and Senate Minority Leader John McKinney, R-Fairfield, who are each considering a bid for governor, said the budget was full of one-time gimmicks, new taxes, fund transfers and an expansion of gambling under the Connecticut Lottery.

"The real issue here is one of failure, failure from a budgeting perspective, failure from the fact that our economy continues to shrink, that our employment continues to be above the national average, and worse, we have a governor and a majority that don't see the problem," McKinney said.

The U.S. Bureau of Economic Analysis released a report Thursday that showed Connecticut as the only state in the nation with a shrinking economy last year.

Democratic legislative leaders said they were proud of raising the state's minimum wage, passing legislation requiring some labeling of genetically modified foods, funding education and investing in jobs. Republicans said more spending cuts were needed, and Gov. Dannel P. Malloy did exactly what he said he wouldn't do while campaigning for governor: he used one-time revenues to close the budget deficit.

The budget relies on the fiscal year 2013 surplus of about $220.8 million, which largely came from residents who made taxable gifts in 2012 before the gift and estate tax rates were raised.

"We have heard from this governor that this budget does not kick the can down the road, yet his budget relies on (a total of) $557 million in one-time nonrecurring revenue," McKinney said.

Malloy said the budget uses fewer one-time revenue sources than his predecessors' budgets did, and that it funds pensions - $900 million for the pension system over two years - where budgets under previous governors did not.

"No session is perfect, but I believe we made progress this year," Malloy said.

The budget also includes $315 million in taxes, which come from extending temporary levies such as the energy-generation tax, and raising the gross receipt tax at the gas pump from 7 percent to 8.1 percent.

When Senate President Pro Tempore Donald Williams, D-Brooklyn, was told Republicans said the budget raises taxes, he said, "I would say that they are wrong, that they are wrong on so many different fronts, and now they are making an issue of this themselves, in the fact that they never put (a budget) on the table."

Cafero said Republicans have put forth budgets for at least the past seven years but that Democrats haven't taken them seriously. Republicans weren't going to put out a budget just to distract the public from the Democrats' problematic spending plan, he said.

He said it would be "pretty tough" for Malloy to make a successful bid for re-election based on his two budgets.

"First one, he doubled down. He was going to do the tax increase, betting that the economy was going to turn around and we would be awash in revenue and things would be smooth sailing and he would march triumphantly to his second," Cafero said. "It didn't work out that way, and the second budget, the one that is going to bring him to Election Day for re-election in 2014, is just an embarrassment."

Some of the other $557 million in one-time revenues include "sweeps" from an independent fund into the general fund, which is used for operating expenses. For instance, the budget includes a $109.7 million transfer from the transportation fund - money for new roads and bridges - to the general fund.

The budget also includes a $25.5 million transfer from the Clean Energy Finance and Investment Authority, which funds clean energy projects such as fuel cells, wind and solar. The budget originally sought to remove $30.5 million from the fund.

Not including federal reimbursements, such as the one for Medicaid, the budget is projected to increase by 3.7 percent in fiscal year 2014 and by 2.2 percent in fiscal year 2015, according to the nonpartisan Office of Fiscal Analysis.

OFA projects a $1.2 billion budget deficit in the following biennium.

When asked about future deficits, Malloy said, "We are not going to have that deficit. We are going to take the steps needed to align our expenditures with our resources just as we have proven that ability to do in our two budgets, and we did it this year without raising taxes."

Malloy said the General Assembly and his administration made progress this year, counting as achievements a $200 million bioscience fund to create jobs, investment in the University of Connecticut, gun violence legislation, a comprehensive energy strategy, preserving funding to implement education reform and raising the state's minimum wage.

"In all, that second half of the session was a pretty darn good one," Malloy said.

Of raising minimum wage, Williams said, "The men and women who work for minimum wage, who often times work two or three or more jobs to support their families to pay the rent on time … we were able to stand up and increase the minimum wage."

But McKinney questioned why the majority party, so in favor of raising the minimum wage to help those who are struggling, would be in favor of closing the budget deficit with the expansion of keno.

Gambling ends up being a type of regressive tax that falls on people in low income brackets, McKinney said.

"Gambling is a loser ... any way shape or form you look at it, and that is why Connecticut is going in the wrong direction," McKinney said.

j.somers@theday.com

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