HARTFORD—State Representative Gail Lavielle (R-143) opposed an approximately $19 billion midterm budget agreement between Governor Dannel P. Malloy and majority Democratic lawmakers in Saturday’s House session, citing its unsubstantiated revenue estimates and misleading accounting practices. The House voted on the budget adjustments bill on Saturday, May 3 shortly before 10 p.m., and it passed without a single Republican vote.
The General Assembly, which sets a biennial budget in odd-numbered years, must pass a revised midterm budget in even-numbered years, taking into account both changes in revenue assumptions and revisions in spending requirements and policies.
Last week, consensus revenue projections established by the administration’s Office of Policy and Management (OPM) and the legislature’s nonpartisan Office of Fiscal Analysis (OFA) showed a dramatic decline of $460 million in anticipated tax revenues, which forced majority leadership to abandon plans to send out individual taxpayer $55 rebate checks just before the November election. Then, on Saturday afternoon, majority leaders on the Finance, Revenue, and Bonding Committee introduced a last-minute $75 million increase in “miscellaneous revenue”. When asked, they explained that they expected the state to collect these funds from delinquent taxpayers. Notably, OFA representatives stated that they could not substantiate this claim.
“Unfortunately, this budget rests on unsubstantiated assumptions and commits one-time available funds to long-term uses,” said Rep. Lavielle. “If the legislature and the administration don’t face budgetary realities, Connecticut may well be left with significant ongoing future commitments that won’t have corresponding ongoing revenue streams to sustain them. The inevitable consequence is higher taxes for our already beleaguered taxpayers, or broken promises to our most vulnerable populations – or both.”
Rep. Lavielle noted that while the majority’s adjusted budget is presented as balanced, it relies on a number of misleading accounting tactics, including:
- Assuming $75 million in unspecified “miscellaneous” tax collections
- Ignoring $52 million in contractually required payments for retiree healthcare
- Delaying repayment of $196 million in economic recovery notes
- Raiding about $20 million from the Special Transportation Fund to be used for non-transportation purposes
- Using more than $20 million from accounts outside the General Fund, money that will not be “counted” as spending, to pay for new long-term Higher Education programs
It also increases spending by 2.5 percent, including funding for more than 480 new state employees.
“The General Assembly has a responsibility to protect the people of Connecticut by not making commitments that jeopardize the state’s financial future and its ability to provide the services they pay for,” said Rep. Lavielle. “Sadly, this adjusted budget puts the state on a path that will lead to a two-year structural deficit of almost $3 billion by 2017. Unfortunately, it sacrifices long-term fiscal health for short-term appearances.”
Rep. Lavielle and her fellow Republicans presented an alternative budget proposal in late April, and updated it last week to reflect the drop in projected revenues.
The primary goal of the Republicans’ plan was to undo the misleading accounting maneuvers and budgeting techniques in the Democratic proposal. It reduced spending, with measures like a hard hiring freeze and a travel ban for state workers, restored funding for road and bridge repairs, increased municipal aid by $21 million, took steps toward reducing long-term liabilities, and stayed below the state’s spending cap.
Republicans offered their alternative budget proposal as an amendment to the majority’s budget adjustment during the House floor debate on Saturday night, but it was defeated on a party line vote.
“I was disappointed that majority leadership did not consider the proposals by House and Senate Republicans, particularly given the high degree of effective bipartisan collaboration in other areas like consumer protection, education, and campus sexual violence prevention during this session,” said Rep. Lavielle. “Regardless, we must continue to fight for responsible budgeting that does not allow short-term gain to jeopardize sustained and structural fiscal health. The people of Connecticut deserve a fully bipartisan, open and honest budget process, one that’s based on realistic assumptions and makes no commitments the state can’t afford.”