Malloy Budget: Two Years, Nearly $40 Billion

By SUSAN HAIGH, Associated Press

HARTFORD, Conn. (AP) _ Connecticut Gov. Dannel P. Malloy unveiled a budget Wednesday that would try to close the state’s funding shortfall by raising taxes across the board and seeking billions of dollars in concessions from state employees, but avoid the massive layoffs and draconian spending cuts seen in other struggling states.

The new Democratic governor, who appeared before a joint session of the Democratic controlled General Assembly, said the state faces a historic opportunity to renew people’s faith in government and begin growing much-needed jobs.

“The tide is turning for us if we step up and work hard with courage and conviction. I hope you agree,” Malloy told the lawmakers during his televised address. “We are here for a purpose. This is our time to do what we were elected to do, to fix what’s broken once and for all.”

A $3.2 billion deficit is projected for in the fiscal year that begins July 1, and Connecticut’s unemployment rate was 9 percent in December.

Much of the details of Malloy’s two-year, nearly $40 billion budget have been revealed in recent days, including proposed consolidations of state agencies and proposed increases in taxes including the personal income, gas and sales tax. Numerous services once exempt from the sales tax would now be taxed, such dog grooming and yoga studios.

For the first time, however, Malloy publicly suggested $2 billion in possible concessions the state’s approximately 50,000 state employees could make to help cover the state’s budget gap. For example, he said moving state employees to a health benefits package like the one covering federal employees would save about $300 million over two years.

Three more furlough days over two years would save $80 million.

Malloy, who was strongly backed by unions during the 2010 gubernatorial election, said he knows state employees agreed to concessions under former Gov. M. Jodi Rell’s administration. But he said it’s not enough.

“I need to ask them to do what I’m asking everyone else across the state to do: more,” Malloy said. “Because their current wage, health care and pension benefit levels are simply not sustainable.”

Union leaders have said they are willing to work with Malloy. They’ve already been meeting with the governor’s staff, but have yet to discuss collective bargaining issues. Malloy made it clear he wants those talks to begin soon. He said he appreciates the savings ideas suggested by state employees but acknowledged they fall far short of what’s needed.

“The time has come to take the next step and begin discussions regarding concessions,” Malloy said. “I don’t make these suggestions to be antagonistic. Just realistic.”

Malloy has received some criticism from the minority Republicans for relying too much on raising taxes. His budget calls for $1.5 billion in tax increases for the first year of the two-year budget.

(Copyright 2011 by The Associated Press.  All Rights Reserved.)

Read the governor’s full budget address.


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