With no end to the legislature’s fiscal stalemate in sight, Gov. Dannel P. Malloy said Wednesday he would not be surprised if there is no state budget in place by this fall.
Malloy has been pushing hard for a vote for months, but the state House of Representatives and Senate have not reached a compromise as some Democrats are seeking tax increases and Republicans are pushing for more spending cuts to close a $5 billion deficit over two years.
“I do fear it could very easily go into the fall,” Malloy told The Courant on Wednesday.
He added, “I’m ready to work with people. I think this needs to get resolved.”
As a compromise, Malloy is still pushing for passage of a short-term, mini-budget because it would provide fewer cuts than the executive order that is currently directing state finances. Passing the mini-budget, however, has been rejected several times as House Democrats say they are spending their time trying to craft a full, two-year, $40 billion budget instead of a short-term fix.
“It has been made abundantly clear that the House has no desire to take up a mini-budget,” Malloy said. “I don’t run either the House or the Senate, and quite frankly, I’m having to work in state government in a way that I’m not happy. We should not be governing by executive order.”
In a break from the past, the state still has five budget proposals that are active in late July. Besides Malloy’s budget, all four legislative caucuses — the House and Senate Democrats, and the House and Senate Republicans — have separate proposals. Traditionally, the budgets are melded together before the end of the fiscal year in June and crafted into a final package that Malloy signs into law.
But now, the various caucuses still have differences on issues.
“We have two houses, four bodies, and nobody’s getting along,” Malloy said Wednesday.
Senate Republican Leader Len Fasano said the biggest problem is there are no serious, ongoing budget negotiations to reach a bipartisan solution. Republicans have exchanged budget ideas with Democrats behind closed doors, but not enough to reach an agreement, he said.
“Those aren’t negotiations,” Fasano said Wednesday. “Those are fact-finding missions. How do I negotiate against a ghost? That’s what makes it frustrating.”
While Democrats have criticized Republicans for having two separate proposals, Fasano said that the House and Senate Republican versions are largely in agreement. He said the “minor” differences could be resolved, and Republicans in each chamber would vote for their colleagues’ version in the other chamber.
One of the biggest sticking points at the Capitol is a proposal by the House Democrats to raise the state’s sales tax to 6.99 percent, up from the current 6.35 percent. Republicans are strongly opposed to any tax hikes, while Malloy has criticized the idea. Malloy has repeatedly said that spending cuts should be a higher priority than tax increases and says the only budget that he has seen so far that he would sign is his own.
House Democrats have been far more optimistic than Malloy. House Speaker Joe Aresimowicz described Malloy this week as “the pessimist” among the negotiators.
“We’re getting there. We’re closer every day,” Aresimowicz said. “The governor even said that, and he’s been the pessimist in the group.”
Asked about the latest on the budget talks, House Majority Leader Matt Ritter of Hartford said, “We’re making substantial progress.”
Ritter said that a key piece of the budget was Monday’s approval by the House of $1.5 billion in labor concessions through the State Employees Bargaining Agent Coalition, known as SEBAC.
“We’re getting there,” Ritter said, referring to the SEBAC action as “a partial budget vote.”
State senators will return to Hartford to vote on the SEBAC agreement on Monday, but lawmakers said they don’t expect to be voting on the budget.
Aresimowicz said flatly that Malloy and the Senate were both concerned about the proposed 6.99 percent sales tax that is designed to provide a steady stream of money for cash-strapped cities and towns.
“We feel comfortable in the House that the budget that we put out was a budget that moved the state forward and provided sustainable funding for the municipalities,” Aresimowicz said. “The Senate felt differently. The governor felt differently. So we sat down with them.”
During the annual veto session on Monday, the attendance was nearly perfect — with all 36 senators present and only one of the 151 House members absent. But lawmakers said that if the budget stalemate spills into August, it will be increasingly difficult to get all 36 senators back to Hartford when they are on summer vacation in numerous places. As such, lawmakers have been pushing to get a deal at some point in July with the thought that extra delays could potentially push a final agreement past Labor Day.
Later Wednesday, Malloy told reporters: “This is more likely to be protracted than it is to be short term.”
With no state budget, nonprofit organizations that hold contracts with the state to provide services have not received the money that they normally get to run their programs. As such, they held a news conference Wednesday outside the Capitol to mark the day that many workers were forced to take an unpaid furlough day because of the fiscal stalemate.
Barry M. Simon, the president and chief executive officer of Oak Hill that serves people with disabilities, said his organization has been forced to close four group homes and two day programs due to state cutbacks.
“The state depends on us to be providing these services, but we cannot depend on the state to be funding these services,” Simon said. “I wish that every legislator had on their mind what is happening to our participants. God forbid that every legislator had a son, a daughter who was receiving services, but if that were the case, we might be seeing different public policy. Right now, as you can see, we are here and they are not, and we need them to get this budget solved immediately.”
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