State Budget Proposal—Smart, No-New-Taxes Plan or Biggest Gimmick-Filled Scheme in Years?

A big thank you to NBC Connecticut for having me on this morning. I’ll be appearing again next Wednesday and Thursday mornings as the legislative session comes to a close.

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As usual, it’s all about one’s viewpoint. Majority legislative Democrats and the Malloy administration have a tentative budget deal they claim is balanced, contains no new taxes and is within the constitutionally mandated spending gap. Republicans, who were completely cut out of the negotiations, say the plan blows through the spending cap, does contain new taxes and is a dishonest, gimmick-filled mess. A vote on the new, two-year spending plan should come by the end of the week.

The major disagreement is whether the proposed budget is within the spending cap. The governor originally proposed redefining the cap so his proposal would be within it. But that requires a super majority—60 percent—in both the House and Senate. When it became clear the votes weren’t there, the governor and the Democrats took a different tact. The decided that because $500 million a year spent on Medicaid is eventually reimbursed by the federal government, it shouldn’t be counted as “spending” for the purpose of staying within the cap. To do that, a simple majority vote is needed.

Republicans are adamant that not counting Medcaid spending against the cap is a huge, expensive gimmick. Senate Minority Leader John McKinney reportedly called the move unconstitutional. When the budget comes up for a vote, expect a slew of amendments from the GOP.

There is also disagreement about whether the Democratic-Malloy budget raises taxes. The governor says it does not. Republicans point out that some taxes that were supposed to “sunset” are going to continue. These include taxes on electricity generation, corporate profits and others. Also, the proposed budget allows a scheduled tax on gasoline to go into effect July 1st.

There is a serious political backdrop to all of this. Republican leaders of both the House and Senate—Larry Cafero and John McKinney respectively—are considering a run for governor. Both have been highly critical of the governor at just about every turn.

The governor came out swinging at the Republican critics of the budget proposal Tuesday. Among other things, Malloy said critics are “…a bunch of people trying to score cheap political points.” And in a real slap at the GOP, Malloy said, “And, by the way,” he added, “Republicans in this building … didn’t have the guts to put out a budget themselves.” Ouch. For what it’s worth, Republicans have told The Hanging Shad they will offer alternatives to the budget proposal in the form of amendments during the debate.

There’s one week to go in the session and plenty of work still to do. There will likely be a special session even if it’s just to clean up loose ends from the session.