Shock At The Capitol: Republican Budget Passes Legislature, Malloy Vows To Veto

HARTFORD, CT — The political winds changed in Hartford between Friday and Saturday after both the state Senate and House passed the Republican budget. Three Democrat senators and six Democrat representatives joined all Republicans in passing the bill.

Gov. Dannel Malloy threatened to veto the GOP budget if it passes.

" It relies on too many unrealistic savings, it contains immense cuts to higher education, and it would violate existing state contracts with our employees, resulting in costly legal battles for years to come," Malloy said in a statement.

Instead Malloy said the legislature should reach a new agreement that is ideally bipartisan.

“Today’s vote in the legislature was a surprise, and it may represent a shift in the dynamic of the General Assembly," he said. "But it isn’t a shift for me. I have consistently been in favor of reaching a sensible, realistic budget – one that is balanced honestly and that continues to make progress on Connecticut’s long-term fiscal challenges."

Democrats called seven amendments to the Republican budget bill, but all were defeated, according to the CT Mirror.

The veto will likely mean that Democrats and Republicans will have to work on a truly bipartisan budget. A serious Oct. 1 deadline looms. Malloy has threatened to drastically cut municipal aid if a budget isn't passed before then. A plan to raise Medicaid rates to hospitals in exchange for new taxes must also be passed by then if Connecticut is to receive federal reimbursement, according to the Mirror.

UConn President Susan Herbst said the approved budget would cut UConn and UConn Health funding by $309 million over two years and would devastate the university, according to the Connecticut Post. Regional campuses would have to close along with some academic departments. Financial aid to students would be reduced. The plan also calls for professors to start teaching more.

The Republican budget comes with no new taxes and doesn't shift burdens of teacher pensions onto municipalities. It includes overtime savings of 10 percent, a hiring freeze on non-24-hour non-union positions and cuts the number of legislative committees.

The Republican budget also includes 10 percent cuts to certain agency accounts.

It would also establish a spending cap, bonding cap, municipal mandate relief and pension reform beginning in 2027 when the state employee union deal expires. Pension reform would include a higher contribution rate, eliminating overtime from pension calculations and eliminating cost-of-living increases until the fund balance is deemed healthy.

The Republican budget passed 21-15 Friday and then went to the House for an early-morning vote Saturday. Senate Democrat President Pro Tempore Martin Looney, a Democrat from New Haven, warned that Malloy would veto the GOP budget, which could leave the state in uncertain fiscal shape.

"It will now drag on even longer to the great detriment of Connecticut," Looney said of the budget process.

Looney said the three senators hadn't explicitly told Democratic leadership they would vote for the GOP plan. Looney spoke with two of them shortly before debate began and was told they would decide how to vote after the debate, he said.

Senators Gayle Slossberg, a Democrat from Milford; Paul Doyle, a Democrat from Wethersfield; and Joan Hartley, a Democrat from Waterbury, spoke during debate and said it's time for the state to change the way business is done. Doyle said he hopes their votes will lead to a bipartisan budget.

Legislative GOP leaders said they courted the three Democrat defectors by including their proposals in the GOP budget proposal. The three Democrat senators were told their suggestions for systemic changes would be included in the Democratic budget in return for their support for the state employee union concession deal, but weren't, said Senate President Pro Tempore Len Fasano, a Republican from North Haven.

“It takes courage what they did, but I think they did it because they believe in the state, they are frustrated, and they are looking for a new direction, and that’s all our budget does,” Fasano said.

The state employee union concession deal will save the state an estimated $1.5 billion over the next two years. In return it promises no union layoffs for four years and extends the current contract agreement to 2027. The measure passed along party lines.

"I think it showed one very important thing," said House Minority Leader Themis Klarides, a Republican from Derby. "This was being talked about for the past two days as if you do not vote for the Democrat budget you are absolutely voting for the governor's draconian cuts as if there were two choices and two choices only."

There was clearly a third option, Klarides said.

Slossberg said the $1.5 billion tax hike in 2011 was supposed to solve Connecticut's fiscal woes and again taxes were raised in 2015.

"I believe that if we don’t make substantial changes today, slow down that growth rate, we will continue to see multi-billion dollar deficits," she said.

Legislators were admonished not to lead with tax increases in the budget at the beginning of the session, Hartley said. Raising taxes by more than $1.5 billion with the Democrat plan is leading with taxes, she said. The problem is compounded when revenue projections continue to fall flat.

"That’s going in circles," she said. "I’d say that’s not how we are turning the curve.”

Doyle said his vote was very difficult.

"I’m sure many of my colleagues are furious with me, but all I can say is I did what I was elected to do for the people of the state of Connecticut," he said.

The Democrat budget contained tax increases to hospitals, the possibility of tolls, a new tax on secondary homes and a large amount of aid to help the City of Hartford avoid bankruptcy. Even if the Democrats' budget had been approved, the state was facing another multi-billion dollar deficit after a couple of years, officials said Friday.

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