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Connecticut Finally Has A Budget

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Nov 012017

On Tuesday Gov. Dannel Malloy Tuesday finally signed into the law the bipartisan budget agreement members of the General Assembly reached, but he vetoed appropriations in support of a new hospital tax proposal and said the budget is “by no means a perfect document.”

In a statement, Malloy said, “After 123 days without a budget, it is time to sign this bipartisan bill into law and continue the steady and significant progress our state has made over the past several years. Connecticut’s families and businesses deserve to have a budget in place, one that provides a stable environment to live and work.”

He added, “While there are certainly many provisions of this budget I find problematic, there’s also a clear recognition of many of the fiscal priorities and concerns I’ve consistently articulated since January. I appreciate the work of the General Assembly in passing a budget to my desk that I can sign.”

Malloy’s office said there are provisions of this budget that the administration finds problematic, but, taken as a whole, the budget incorporates many of Malloy’s policy priorities, including creating a municipal accountability review board aimed at playing “a significant role in bringing the City of Hartford back from the brink of bankruptcy and providing the state the necessary tools to intervene early to restore fiscal stability to struggling towns and cities.”

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The budget adopts changes to the Estate Tax and Insurance Premium Tax and supports an initiative to assist residents with crumbling foundations.

“While this may be a step in the right direction, make no mistake about it – this is by no means a perfect document and it is not one I would have negotiated,” Malloy said. “There are real legal and structural issues with the budget presented to me, and I have concerns about the state’s ability to keep it in balance over the biennium and beyond. That’s why, along with my signature, I am also line-item vetoing a component of the budget relating to the supplemental payments to hospitals that would leave Connecticut taxpayers exposed to legal challenges and a potential $1 billion budget shortfall per year. I strongly urge my colleagues in the General Assembly to convene as soon as possible to pass a legal alternative to the illegal hospital tax and troublesome supplemental payment and rate language presented in the bill.”

Klarides Responds

House Republican Leader Themis Klarides said towns and cities will get relief from having a budget in place after Gov. Malloy signed it today, but his line-item rejection of the state hospital reimbursement deal could lead to future deficits and will require further legislative action.

“The good news is that our towns and cities will finally have relief in the way of state aid and our much needed social services programs will continue,’’ Klarides said. “The bad news is the issues regarding our hospitals remain unresolved because of the Governor’s line-item veto, and the House and Senate will have to address that.’’

Klarides said the initial Republican budget passed in mid-September with Democrat votes and vetoed by Gov. Malloy was a better plan for Connecticut because it did not raise any taxes and provided much-needed relief to municipalities. The compromise budget reached with Democrats last week is preferable to the highly destructive executive orders that the Governor issued that would have eliminated aid to many towns and cities and gutted the social services networks.

“The ongoing dispute between the Governor, the hospitals and the legislature on the language required to access the pool of federal money the hospitals are seeking we believed was settled in the compromise budget,’’ she said. “Now we need to deal with his line-item veto.’’ 

Lawmakers have consulted with the Connecticut Hospital Association on how best to devise a plan that will succeed in obtaining federal reimbursement for the taxes hospitals will pay.