And in Other News: Big State Budget Battle Ahead; Even Dems Deeply Divided on How to Proceed

The General Assembly’s finance, revenue and bonding committee is expected Friday to vote on a new two-year budget plan, a next step in the budget process. The Shad has spoken with finance committee members from both sides of the political aisle and they tell me that unlike other years, the committee rank and file are deeply divided on whether to raise taxes, borrow even more to be able to sunset current taxes or follow the governor’s lead.

First, just about everybody and every advocacy group is hating on the governor’s budget. It has no chance of passing as is. Among the things the finance committee members don’t like is Gov. Dannell Malloy’s proposed extension of the tax on energy generation. Powerful senators such as Andrea Stillman, whose district includes the Millstone nuclear power plant, want the generation tax to go away. How do you replace the revenue? By bonding (borrowing) more.

Republicans tell me they will absolutely not support more borrowing. The governor’s budget does it and they won’t stand for the finance committee doing even more. As Senate Minority Leader John McKinney is quoted as saying, “It is astonishing to me that the finance committee could take a fiscally irresponsible budget proposal from Governor Malloy and make it even worse…You would never teach your children to manage debt by paying credit cards off with credit cards, but that’s exactly what the State of Connecticut is doing, and eventually, we’re going to expect our children to pick up the tab.”

Another area of concern is the hit ($400 million) hospitals take in the governor’s budget. Expect the finance committee package to try to lessen the blow. Gov. Malloy cuts payments to the hospitals, but as has pointed out, hospital officials are not exactly struggling personally.

Legislators are trying to find a compromise to the governor’s idea to phase out the car tax. The problem there, again, is a loss of revenue for cities and towns that isn’t replaced with another revenue stream. Municipalities may have to raise property taxes to make it up.