Gov. Malloy Signs Bipartisan Budget, Highlights Fully-Funded State Pensions and New Reforms to Strengthen Struggling Cities
Removes Illegal Hospital Tax Proposal, Urges Legislators to Pass Legal Alternative
(HARTFORD, CT) – Governor Dannel P. Malloy today signed into law the bipartisan budget agreement reached by members of the General Assembly, highlighting important reforms for strengthening Hartford and other cities, fully-funded state pensions, and other key initiatives championed by his administration. The Governor line-item vetoed appropriations in support of a new hospital tax proposal, citing its unsound legal basis in federal law, and urged lawmakers to pass the workable language his administration provided that will make the proposal legal and successful.
As part of his executive actions, the Governor released a detailed signing statement outlining his rationale for signing the budget, as well as a number areas of policy disagreement and fiscal concern the administration will monitor in the months ahead for potential action and fixes from lawmakers in the legislature. The Governor also sent a letter to legislative leaders urging them to amend the hospital tax language to bring it in line with federal law.
“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,” Governor Malloy said. “Connecticut’s families and businesses deserve to have a budget in place, one that provides a stable environment to live and work. 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.”
While there are provisions of this budget that the administration finds problematic, as detailed in the Governor’s signing statement, taken as a whole the budget incorporates many of Governor Malloy’s policy priorities. Notably, this budget:
- Creates a Municipal Accountability Review Board as proposed by Governor Malloy that will play 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.
- Makes the full actuarially required contribution payments to the state employee and teachers’ pension systems and does not rely on stealing from pensions – a clear line drawn by Governor Malloy throughout his administration.
- Restores much of the higher education funding cuts to UConn and the Connecticut State Colleges and Universities system contained in the vetoed SB 1501 as amended by Senate Amendment B.
- Includes a formula-driven education cost sharing grant that recognizes the impact of poverty and English language learners in our highest-need communities, representing an important first step to a more equitable distribution of education funding.
- Includes structural changes, including a constitutional spending cap, municipal mandate relief, and required votes on all collective bargaining agreements by the legislature, which the Governor proposed in 2011.
- Adopts changes to the Estate Tax and Insurance Premium Tax proposed by the Governor, which will enhance Connecticut’s economic competitiveness.
- Supports an initiative to assist residents with crumbling foundations.
The Governor’s signing statement highlights these positive aspects of the budget in greater detail. It also covers a number of areas of serious concern for the administration. They include:
- Damaging sweeps to energy funds, which require the state to take ratepayer funds that were collected in order to lower energy costs overall through investments in efficiency and clean energy. In the coming weeks, the administration will outline more specific ideas to address these cuts, avoid their immediate negative impact on consumers, and ensure that Connecticut can maintain its commitments to clean energy investments in the energy marketplace.
- Cuts to economic developments programs that have helped preserve and create tens of thousands of jobs in recent years.
- Problematic assumptions on both the revenue and expenditure sides of the budget, which could be unachievable over the biennium and contribute to exacerbated structural deficits in the out years.
“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,” Governor 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.”