By SUSAN HAIGH Associated Press
HARTFORD, Conn. (AP) _ Lawmakers gave final legislative approval Monday to a proposed $44 billion two-year state budget that Gov. Dannel P. Malloy acknowledged is not perfect but shows the state has gotten its “priorities straight.”
But whether the plan is the cure needed to fix the state’s economic ills was a key point of disagreement. The budget bill narrowly passed the Senate by a 19-17 margin, with three Democrats joining Republicans in opposition, and now awaits Malloy’s signature.
Republican senators maintained the budget agreement reached by the Democratic governor and majority Democratic leaders of the General Assembly does not help the state recover from the recession. They said the state continues to trail other states seeing economic improvements, including New York and Massachusetts.
“We are going the wrong way. We were going the wrong way two years ago,” said Sen. Jason Welch, R-Bristol, referring to the last budget that relied on higher taxes to help cover a massive budget deficit. “We continue to go the wrong way now despite the many warnings from the many people.”
Malloy, speaking to a group of newspaper editors during a Monday conference call, maintained that the budget proposal continues to make the changes needed to produce savings in state government while not raising new taxes.
“Is this perfect? Not by a long shot. But we are making changes, systemic changes that are producing real savings across the board,” Malloy said. “When you consider where we were two years ago on so many issues and compare that today, there should be no question we are moving in the right direction.”
He pointed to increased funding for economic development and education, including a $1.5 billion investment over 10 years at three UConn campuses to construct science, technology, engineering and math facilities. He also touted efforts to fully fund the state’s pension system and exempt clothing and footwear costing less than $50 from the state’s sales tax, beginning June 1, 2015.
“We still have a long way to go, but this budget shows that we’ve gotten our priorities straight and we are determined to keep Connecticut moving forward,” he said.
Democrats also touted how the budget doesn’t include major cuts in aid to cities and towns, which they said could have resulted in higher local property taxes.
Republicans in the Senate, as in the House of Representatives, picked apart the Democrats’ budget, complaining it was littered with broken promises. They criticized it for sweeping money from funds dedicated to programs such as transportation, stem cell research and energy efficiency; cutting $341 million in state payments to hospitals; not stopping an automatic July 1 increase in the gross receipts tax on gasoline; and continuing some old tax increases that were set to expire, such as a 20 percent surcharge on the corporate income tax.
They were particularly critical about how the bill shifts about $6 billion, mostly federal reimbursement for Medicaid health care spending for the poor, out from under the constitutional spending cap. After those funds are moved off-budget, the budget is about $37.6 billion.
“This clearly is against what the people voted for and what they wanted when they amended our constitution,” said Senate Minority Leader John McKinney, R-Fairfield, referring to the state’s spending cap, enacted after the state passed a personal income tax in 1991.
But Democrats said they recently discovered Connecticut is one of the only states with a spending cap that counts federal Medicaid reimbursements toward its bottom line, squeezing out room to spend money on key areas such as education.
“This allows us to get our fair share of federal dollars, and taxpayers in Connecticut send a lot of dollars to Washington through our income taxes,” said Senate President Donald E. Williams Jr., D-Brooklyn. “Every other state gets those dollars back, unrestricted in terms of how they account for those. Connecticut stands alone in punishing our taxpayers from getting their fair share.”
Part of the bill authorizes the Connecticut Lottery Corp. to introduce Keno, a lottery-type game played in other states.
Malloy said the decision came down to the legislature opposing his proposal to auction off electricity services for about 800,000 customers who’ve not selected a power company. Because his budget relied on $80 million from electric companies vying for those customers, he said the legislators had to find other revenues.
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