Feb 8 Connecticut Governor Dannel Malloy on
Wednesday proposed nearly $1.4 billion of spending cuts,
including big savings from negotiations with labor unions, to
help close a $1.7 billion budget hole in fiscal 2018.
In his $18 billion general fund spending plan for 2018,
Malloy also proposed roughly $320 million of revenue generators
to close the gap, including the elimination of property tax
credits on personal income taxes.
In the following year of the two-year budget proposal,
another $1.64 billion in cuts would be required to close a
bigger deficit of $1.9 billion, according to budget documents
released in conjunction with the Democratic governor's address
to lawmakers. (bit.ly/2kTvlGP)
"These cuts are not made lightly," Malloy said. "They
include things that I myself strongly support."
Including all funds, his biennial budget is $40.6 billion
for the next two years combined. The proposal, if adopted, would
result in an eight-year period in which the state general fund
budget grew only 2 percent on average, he said.
Connecticut has been daunted by slow revenue growth as fixed
costs, including for public pensions hit by poor investment
returns, continue to balloon.
Malloy proposed shifting a third of the costs of the state
teachers' pension fund - or about $408 million in fiscal 2018 -
to local governments, which currently pay nothing into the
Teachers Retirement System despite retaining local control of
school staffing levels.
The biggest portion of savings next year would come from
$700 million of concessions, mostly on pension and health
benefits, from the 15 unions that make up the State Employees
Bargaining Agent Coalition (SEBAC).
In 2019, those concessions would add up to another $868
million in taxpayer savings. The state's contract with SEBAC
does not expire until 2022, so it is seeking voluntary changes
from the unions.
If there is no deal, Malloy's budget calls for layoffs of up
to 4,200 state employees in order to save the money, though he
said in his address that he is a "staunch, lifelong advocate for
the right to organize."
As expected, Malloy also proposed an expansion of the
state's system for municipal intervention to help avert a crisis
in cities struggling with fiscal problems.
"It is in our collective best interest that no town be
brought to the brink of bankruptcy," Malloy said.
Additional measures to generate revenue include hiking
tobacco taxes and lowering the state's Earned Income Tax Credit,
used by low- and moderate-income families, by 2.5 percentage
points to 25 percent of the federal benefit level.
(Reporting by Hilary Russ in New York; Editing by Lisa