Budget Day Wednesday: More Spending but How Will it be Paid For?

Join Brad Drazen, Kerri-Lee Mayland and me on NBC Connecticut at 6:30 Wednesday morning for a budget preview. I will then be back with the evening folks at 5:30 for a wrap-up. And of course, all day on twitter @TheHangingShad. Tune in if you can.

Stories have been trickling out for the past week or so on what Gov. Dannel Malloy with have in his budget proposal as he addresses the General Assembly Wednesday at noon. What we do know is there will be more spending. The question remains, how does he propose to pay for it.

Some high profile ideas have already been floated:
•$14.1 million more to help turn around failing traditional public schools
•$20 million to nonprofit community providers for infrastructure improvements
•$8 million for increases in judges’ salaries over four years as recommended by a judicial compensation commission
•And the big one, $1.54 billion in bonding over the next ten years to improve and expand UConn

There are also things the governor has ruled out:
•No new taxes. By this, his people have told The Hanging Shad, he means no new taxes or increased rates on existing taxes.
•According to reports, local aid to cities and town will largely not be cut. Speaker of the House Brendan Sharkey has been saying for weeks that such a cut was likely.

The possible solutions:
•Further agency consolidations
•Continuing taxes and fees that were supposed to “sunsetted.” (Malloy has said not sunsetting these doesn’t constitute “new taxes.”)
•Eliminating the property tax credit. Remember, Malloy proposed eliminating it in the current budget before agreeing to reduce it from a maximum $500 to the current $300.
•Eliminating the earned income tax credit. It’s only been in existence for the current budget.

All of this is in the context of a deficit of at least $140 million in the current fiscal years and $2.2 billion in two years—and that’s with the deficit mitigation plan the legislature passed in special session in December.

There is some serious fiscal heavy lifting to do and likely some surprises. Stay tuned.