Based on improved budget projections, the House speaker said Wednesday that lawmakers can avoid withholding $19 million in municipal aid and $2 million to hospitals in June.
"The majority leader [Rep. Matt Ritter] and I do have a little bit of good news specifically for the towns and the hospitals," Rep. Joe Aresimowicz, D-Berlin, announced at a presession briefing. "It looks like we'll be able to keep them whole."
The decision to withhold the municipal aid was roundly criticized by municipal officials, who were counting on the money to help balance their city and town budgets. The cuts were part of a proposal by Gov. Dannel P. Malloy that aimed at closing a budget gap of nearly $323 million.
Malloy's budget office said last week that the deficit had fallen by $67 million from three weeks ago due to late-year budget cuts.
"We believe it is unfair to ask towns and cities to absorb such drastic financial hits in the last few months of the fiscal year. That leaves them no time to make adjustments, and could lead to property tax increases or significant shortfalls in funding for core services such as education. Our recommended changes to the governor's plan would stop balancing the budget on the backs of property taxpayers," said Sen. Kevin Witkos, R-Canton.
The Malloy administration would rather have the money directed to bolstering the state's rainy day fund.
"As we approach the end of the fiscal year, it is imperative that legislative leaders act swiftly to take up a deficiency bill and implement deficit mitigation," said Chris McClure, a spokesperson for the Office of Policy and Management. "It is our position that any improvements in projections should be directed toward preserving as much of the rainy day fund as possible."
Malloy's budget director, Ben Barnes, is also urging lawmakers to act quickly on his proposed cuts, noting that time is running out.
"Legislative action to mitigate the deficit must take place this spring," Barnes wrote in a letter to legislative leaders from both parties. "We have a mutual obligation to balance the budget each fiscal year and less than six weeks to do so" before the fiscal year ends on June 30.
Lawmakers are focused on drafting a spending plan for the next two years but Barnes urged them to act soon "to balance this year's budget and meet our obligations."
Lower-than-anticipated tax revenue has triggered the current round of budget cutting. In addition to municipal aid cuts, Malloy's plan called for nearly emptying the state's rainy day fund, which stands at $235.6 million.
Senate Republicans are pushing for restoration of the state park money in addition to payments to cities and towns and the hospitals. Malloy's proposal included more than $1 million in immediate spending cuts. "We believe it is wrong to take privately raised funds away from state parks which our parks rely upon to operate," said Sen. Paul Formica, R-East Lyme.