After months of delays and frustration, the state Senate early Thursday voted overwhelmingly in favor of a bipartisan state budget that will be voted on by the House later today, where broad support is expected, too.
The two-year, $41 billion budget eliminates a $3.5 billion deficit over two years and largely preserves aid to schools and municipalities. Connecticut has been without a budget since the start of the fiscal year on July 1 and is the last state in the country without an adopted budget.
The House has scheduled a session for 10 a.m. Lawmakers are hoping for enough votes to override a potential veto by Gov. Dannel P. Malloy, who has been left out of the recent budget negotiations. The Senate passed the measure by a 33-3 vote shortly before 2 a.m.
The Senate vote marked a major step toward ending the longest budget stalemate in state history that has spilled nearly four full months into the new fiscal year. Two Republicans, Len Suzio of Meriden and Joseph Markley of Southington, joined with Democrat Gary Winfield of New Haven in voting against the package.
The budget does not raise income or sales tax rates, although it raises hundreds of millions of dollars in revenue through an assortment of smaller measures, such as increased taxes on cigarettes, a $10 surcharge on motor vehicle registrations to support parks and new fees on ride-sharing companies. And the car tax remains.
Under the legislation that stretches more than 800 pages, Hartford would receive up to $40 million as part of a package to avoid bankruptcy. Cuts to local education would be scaled back from reductions proposed in previous budgets. UConn would still face a significant reduction — about $65 million for each of the next two years — that is less than a cut proposed in the Republican-written budget that Malloy vetoed last month.
The city of Hartford would also be directed to find a buyer for the beleaguered XL Center, a tough sell considering the work needed on the arena.
The proposed budget creates hundreds of millions of dollars in savings by directing the governor’s budget office to make labor and state agency cuts. The bipartisan package saves $110 million over two years by cutting back on the popular property tax credit — which in effect means a tax increase for some middle-class homeowners.
“This bill is not perfect and will not fix all of Connecticut’s problems,’’ said Sen. Paul Formica, the co-chairman of the budget-writing committee. “But it will chart a course that’s new.’’
Senate President Pro Tem Martin Looney of New Haven said two of the biggest wins for Democrats were restoring millions of dollars for cities and towns, along with more money for public higher education. Republicans also claimed victory because the proposal includes a cap on spending and a cap on borrowing, ideas the party has long championed. The plan also requires the legislature to vote on all state-employee union contracts, which has not happened for years when Democrats controlled both chambers of the legislature.
The proposal includes tax cuts for Social Security recipients and pensioners, something leaders of both parties favored. The bill does not include controversial tolls on state highways. Teachers will be required to contribute one percentage point more toward their pensions.
The hospital provider tax would increase to 8 percent, up from the current 6 percent, but the hospitals would receive millions of dollars in return under a complicated arrangement that provides increased federal Medicaid funding.
The measure reduces the earned income tax credit for the working poor and eliminates the state income tax on Social Security in the second year of the two-year budget.
It also avoids proposals by liberal Democratic lawmakers and union activists to boost taxes on millionaires. But the package does include a new $10 surcharge on motor vehicle registrations to fund the operations of state parks. And it would assess a new 25-cent fee on all rides booked through Uber and Lyft, which would raise an estimated $8 million over two years.
“It takes a lot for me to get excited about what happens in this building,’’ said Sen. John Fonfara, a Hartford Democrat who arrived at the legislature in 1987. “I’ve been here a long time, but I’ve never been prouder of being a legislator in this building than I am tonight.’’
A House Vote on Thursday
Malloy was kept out of negotiations and left in the dark about the compromise negotiated by Democrat and Republican leaders, which was kept under wraps until the Senate convened late Wednesday night. Knowing that Malloy could veto the bill, legislative leaders were trying to ensure that they had the necessary 24 votes in the Senate and 101 in the House that would be needed to override a potential veto.
If approved by the state House of Representatives as soon as Thursday, the new budget would mark the end of the longest fiscal stalemate in Connecticut history — more than two months longer than the epic, summerlong battles that led to the creation of the state income tax on Aug. 22, 1991.
The first step toward adopting the budget came Wednesday afternoon when the tax-writing finance committee approved the revenue estimates that form the basis for the budget.
The support for the package was evident when Rep. Christopher Davis, a fiscally conservative Republican who has voted against budgets in the past, said that he would support the bill. As the ranking member of the tax-writing committee, Davis said he would support the all-important revenue estimates. He said that he supported the package because it includes no sales tax or income tax rate hikes, no taxes on cellphones or second homes, no restaurant tax or increase in hotel taxes, among others.
“Truly, it was a compromise budget that I am comfortable supporting,’’ Davis said.
Some lawmakers were concerned about a potential tax reduction for “reduced harm tobacco products’’ that have not been approved by the federal Food and Drug Administration and are not yet on the market. But insiders were concerned that language was being placed into the so-called “implementer’’ package without a public hearing on the issue.
The new “Passport to Parks” program will collect an additional $10 on motor vehicle registrations to cover park costs and allow Connecticut residents to park for free at state parks. The bill also calls for taxing daily sports fantasy betting, starting in the second year of the two-year budget.
But Suzio, a conservative Republican from Meriden, voted against the package after saying that the tax and fee increases are too high.
“It’s just a repeat of the mistakes the legislature has made … and I will not be a part of it,’’ Suzio said.
In the same way, Sen. Markley opposed the measure after saying it would be “in bad faith’’ if he voted for a budget with tax increases. He also criticized spending millions on improving the XL Center in Hartford as throwing “good money after bad.’’
On the Senate floor, Sen. L. Scott Frantz of Greenwich said Connecticut has fallen far in the span of a generation from a state that was always ranked in the top five in many categories to a state that is now struggling financially. The budget has only “minor tax increases’’ in a budget that “will save the day for the state of Connecticut,’’ he said.
Less for Education
The bipartisan budget would cut the state’s major education grant by $30 million or 1.6 percent for the current year, cutting almost every district by 5 percent except for 33 districts, including the state’s 30 lowest performing districts. Those districts would be protected from any cuts and would receive exactly what they received in 2017.
In fiscal year 2019, the budget would go up by $30.9 million, restoring it to 2017 levels and a new funding formula would be put into effect. Eighty-one towns would get more funding than they did in 2017 and seven would get the same amount. Eighty-one towns would see a decrease compared to fiscal year 2017 levels.
“Since no district gets cut by more than 5 percent in year one, it gives towns stability,” Sen. Majority Leader Bob Duff of Norwalk said in an email.
The new education cost sharing formula in the budget calls for additional state aid for districts with students who are learning to speak English and adds additional weight to districts where 75 percent of the students are considered low-income. “The new ECS formula will help the students who need it most across the state of Connecticut,” Duff said. “We have a highly educated workforce that businesses rely on and they are counting on us graduating students prepared for those jobs.”
The bipartisan budget is expected to include $65 million in cuts for UConn and UConn Health in each of the next two years — far below the $309 million cuts over the biennium in the previous Republican-initiated budget that was approved by the General Assembly but vetoed by Malloy. The Democrats and Malloy last month proposed cutting UConn by $50 million each of the next two years.
The budget for the Connecticut State Universities and Colleges includes a $14 million cut for the current year – a figure that is about the same as the cut in the budget proposed by Malloy and the Democrats.
In a surprise to some workers and union members, the budget would also cut $13 million earmarked for raises, training and workers compensation coverage for 8,500 unionized personal care assistants.
The workers, who earn an average of $10.50 an hour providing in-home care for elderly and disabled clients, are not state employees and do not receive state health insurance and pensions. The money cut from the budget would have raised their hourly wage to a minimum of $15.
"With this budget, legislators are telling me my work isn’t valuable as I am literally keeping someone alive,'' said Kara O'Dwyer of West Haven. "Home care workers are some of the lowest-paid health care workers in our state. We fought hard for this new contract that was negotiated with the state. I am devastated that Republicans and other legislators chose to cut taxes for the wealthy with the elimination of the estate tax at the expense of workers caring for our elderly and disabled."
The budget also makes reductions in bonding authority including $110 million less for the Connecticut State University system and $75 million less for the XL Center.
The deepest cuts are to the CSU system, whose bond funding was reduced by $110 million in 2018 and left untouched in 2019; the XL Center, which would receive the same amount of bonds in 2018 as under the previous budget, and no bonds at all in 2019; and the Manufacturing Assistance Act, which would get $50 million less in 2019 than in the vetoed proposal.
The budget also reduces the Small Business Express’ bond funding by $15 million over the next two years and Charter Oak College by $9 million.
The bipartisan budget agreement calls for no major changes regarding the property tax on cars — after legislators originally said they would eliminate the unpopular tax in the second year of the two-year budget.
Courant staff writers Russell Blair, Kathleen Megan, Mathew Ormseth and Daniela Altimari contributed to this report.
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