HARTFORD – In an effort to close this year’s budget gap, Democratic leaders are looking at possible cuts to municipal aid and other services.
Cities and towns have been fighting hard to preserve funding at the Capitol for years, but the state’s dire fiscal straits are now preventing any fiscal largesse from flowing to the municipalities.
Based on declining tax collections, the state is facing deficits of $266 million in the current fiscal year and nearly $900 million next year.
As fiscal problems have mounted, Gov. Dannel P. Malloy asked legislators last week for budget-cutting ideas to close the deficits — and the Democrats who control the General Assembly are still working on the precise numbers to close the gap.
“For example, we are examining targeted cuts to municipal aid that reflect avoidable inefficiencies and foster inter-municipal cooperation; looking at programs and agencies that are not providing services in a cost-effective manner; and reviewing existing state contracts with vendors,” according to a letter to Malloy that was signed by the four highest-ranking Democrats at the Capitol: Senate President Pro Tem Martin Looney, Senate majority leader Bob Duff, House Speaker Brendan Sharkey and House majority leader Joe Aresimowicz.
In another budget-related development, legislators rejected Malloy’s proposal to eliminate the 35-year-old minimum pricing law on alcohol. That was designed to raise at least $2.1 million a year in additional taxes from a projected increase in sales, but lawmakers on the general law committee decided to kill the bill without a vote.
Dan Uhlinger, a spokesman for the committee’s co-chairman, Rep. David Baram of Bloomfield, said Monday that there was “not enough support for the bill” at the committee level. The move was considered a temporary victory for package stores because the measure could be revived in an amendment or raised again as part of the overall budget discussions over the next six weeks.
“I can’t find support for it in any committee,” said Carroll J. Hughes, lobbyist for the Connecticut Package Stores Association. “I can’t find support among legislators, period.”
The controversial proposal generated the biggest crowd of the year as hundreds of package store owners and employees jammed into the Legislative Office Building last month for a public hearing. Package store owners and their supporters say that Malloy’s plan would hurt their businesses and force some stores to close because they already operate on thin profit margins. But Malloy says the change is needed because consumers are paying prices higher than those in surrounding states.
As one of his top priorities, Sharkey has been pushing reforms to foster regionalism and hold the line on property taxes under recommendations by the Commission on Municipal Opportunities and Regional Efficiencies. He founded the bipartisan commission that he says is “designed to save taxpayer money by tying town aid to inter-town cooperation in the delivery of services to local families and businesses.”
The Democratic leaders are also looking at “fund sweeps” to find unspent money in various state accounts that can be diverted to the general fund to help offset the deficit.
“We are also examining whether certain accounts have surplus balances that are long-standing, and thus can be more efficiently diverted to alternate uses,” they said.
Legislators are working behind the scenes in an attempt to close the gap before the legislative session ends on May 4. Lawmakers say they are waiting for the April 18 tax returns that not only cover the current fiscal year but open a window into the state’s fiscal health for next year. The budget and tax committees are expected to make their recommendations by April 1, and then the legislative leaders will negotiate the final budget deal by early May.
House and Senate Republicans will also be offering their ideas in detail Tuesday to close the gap for the current year.
In addition, Republicans are also considering possible labor savings of $101 million in the fiscal year that starts July 1. Those savings would require approval by the state employee unions.
Republicans say that the state could save nearly $75 million by requiring additional payments from employees to their pension fund. Currently, employees pay different amounts, depending on when they were hired and whether they are considered hazardous duty’ employees.
In addition, lawmakers say the state could save $11 million by increasing prescription drug co-pays for current employees and retirees. The plan would not include increases in co-pays for diabetes drugs. Currently, there is no co-pay for diabetes, and it would remain that way, according to the Republican plan.
A 90-day supply of generic maintenance drugs, such as those for treating high blood pressure and cholesterol, would remain at $5. But co-pays on many other drugs would increase by $5 to $10 per prescription, depending on whether they were generic or brand-name drugs.
