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Gov. Malloy lays out his budget proposal to General Assembly

Hartford — Gov. Dannel P. Malloy presented his budget proposal for the upcoming fiscal year Thursday with announcements of new spending and tax cuts and a call for legislation that lets "hardworking families ... share in Connecticut's recovery."

Malloy's State of the State address to the General Assembly, postponed a day by the winter storm, got mixed reviews from Republicans and some members of the local delegation as he proposed universal pre-kindergarten, raising the state minimum wage and jobs development in a $19 billion budget.

Several local legislators and some of the opposition party said they didn't see yet how the state would pay for the new initiatives.

"I hasten to remind everyone, I think that the story is really a fantasy," said House Republican Leader Larry Cafero, R-Norwalk.

In an election year in which Malloy, a Democrat, hasn't yet declared his candidacy, he laid out changes that would increase spending on education, reform the state university governance system, refund some taxes and ensure that veterans have a place to live.

Malloy proposed $506.5 million in additional spending, a 2.7 percent increase. The budget for fiscal year 2015 he is proposing would have been $22 billion had the state not already designated $3 billion in federal Medicaid reimbursements as off-budget.

The governor also proposed $445.5 million in increased bond authorizations, which included $25 million for the Shoreline Resiliency Fund, meant to equip the state to deal with rising and surging seas. He is proposing the state spend its $506 million surplus on contributions to the state's Rainy Day Fund and state employee retirement funds and on partial refunds of the gas and sales taxes.

"Our work hasn't been easy," Malloy told the assembled legislators. "No person — and certainly no government — is perfect. Lord knows I'm not. All of our progress has come with setbacks along the way."

But the governor said the state's unemployment rate has decreased and job numbers have grown since he took office.

However, some legislators focused on projections of $1 billion budget deficits starting in fiscal year 2016 and through fiscal year 2018 by the state's nonpartisan Office of Fiscal Analysis.

"We are here today because there was a forecast of bad weather and dangerous conditions so we heeded that forecast, but we don't seem to be heeding the forecast we are getting about future deficits," said Rep. Ted Moukawsher, D-Groton. "And I personally think we should be doing everything possible to try to mitigate those future deficits and be prepared to deal with them."

Rep. Vincent Candelora, R-North Branford, said the General Assembly needs to be "cautious" about increasing spending or programs that can't be sustained.

"I think what we heard a lot today is Election Day rhetoric, and voters need substance, not political pandering," Candelora said. Gubernatorial candidate and Senate Minority Leader John McKinney, R-Fairfield, said he would like the state to use the surplus to pay back the money it borrowed last year.

"The money that is left over is because we borrowed more than we spent," McKinney said.

Malloy's budget chief, Benjamin Barnes, said the state has been increasing spending by 2.8 percent on average under Malloy, which is lower than under his predecessor. If the state continues on that path, it will have balanced budgets or surpluses, he said.

"We aren't out of the woods yet," Malloy said. "We have a lot more work to do. But together we've taken the more responsible path."

Sen. Andrew Maynard, D-Stonington, said the governor's budget proposal is "ambitious" and that he would need more time to review the new programs to figure out where the funding would come from. Sen. Cathy Osten, D-Sprague, said she likes many of the proposals, but the "devil is in the details."

Both said they agreed with adding $10 million to the state's Step-Up program, which provides financial incentive to employers who hire unemployed people. They said they supported continued funding of the state's Small Business Express Program.

"Notably, the one failure (a Mystic burrito shop) was a black eye to what otherwise I think is an extremely useful program," Maynard said. "I am working with a number of groups right now who wish to participate in that."

Rep. Betsy Ritter, D-Waterford, said the Step-Up program has been used by many veterans in southeastern Connecticut, so she was glad to see more funding for that program.

Osten said she appreciated the governor's proposal for increased funding to manufacturing, which has been used in eastern Connecticut. Malloy proposed $125 million to help businesses, which included funds for the Manufacturing Assistance Act and new Advanced Manufacturing Fund.

Maynard said he was interested in expanding the pre-kindergarten program by about 1,000 seats but that he would have to look into whether the plan would be affordable for towns. The governor is recommending $14 million to expand pre-kindergarten seats by 1,020 next year.

"It can't be an unfunded mandate," Maynard said. "We can't just tell people to do it and not provide them with the funding to accomplish it."

Ritter said she liked the pre-kindergarten plan because there is increasing evidence that the pre-kindergarten years are influential for a person's future.

Malloy proposed that students who had been enrolled in college but left for more than 18 months be granted one free course for each course taken at a public college, up to three free courses in total.

"I think many of our students, certainly in southeastern Connecticut as well as other places in the state, have found the economy very discouraging, and this sort of a vote of confidence, you know, may be a little bit of help to go back and finish unfinished business that can be important down the road," Ritter said.

Bonded funds — about $25 million — for the Shoreline Resiliency Fund were also good news to Ritter and Rep. Elissa Wright, D-Groton, who said that will "help homeowners and small businesses and possibly nonprofits."

Ritter applauded the governor's proposal to end veterans' homelessness by 2015 through a new security deposit assistance program, job placement specialists and review of state facilities to see how they could better serve veterans.

Amistad America, the organization responsible for the replica ship that commemorates the freeing of kidnapped Africans before the Civil War, maintains its line item funding of $359,777 in the governor's proposal, despite losing its nonprofit status from the IRS. "I know there will be more discussion about that," Ritter said.


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