Malloy: Budget ‘keeps us firmly in balance’
Gov. Dannel P. Malloy proposed a $43.8 billion budget plus $6 billion in capital expenditures for the state’s 2014 and 2015 fiscal years that includes hundreds of millions of dollars for economic development and millions more for programs to assist municipalities.
The budget proposal addresses rising costs and falling tax revenues through $1.8 billion in cuts to state services, while also providing for future economic growth through a $2 billion expansion of the state’s UConn 2000 program and the new, $200 million Bioscience Connecticut initiative.
“The budget I’m proposing today keeps us firmly in balance,” Malloy said in a Feb. 6 speech to the Connecticut General Assembly. “Slowly, deliberately, and sometimes painfully, we’re building a more sustainable future for Connecticut.”
Malloy’s proposal includes $21.5 billion in all-funds appropriations for the 2014 fiscal year, which begins July 1, 2013, and $22.3 billion in all-funds spending for the subsequent year.
Also included are $3 billion in capital expenditures for each of the years covered by the biennial budget proposal.
Under the proposal, all-funds spending for the 2014 fiscal year would increase by $1.07 billion, or 5.1 percent, over estimated expenditures for the current fiscal year.
The proposal includes no new taxes, but extends three provisions that are set to expire, including a 20 percent corporate tax surcharge, a tax on electric generators and a reduction in the amount of tax credits that insurance companies can access.
Malloy proposed restoring a sales tax exemption for clothing and footwear beginning in the 2015 fiscal year, and called for an exemption of up to $20,000 of the assessed value of motor vehicles from the municipal property tax.
The Department of Social Services account would absorb the brunt of the proposed $1.8 billion in cuts to the state services budget.
State Budget Director Benjamin Barnes told reporters that funding to hospitals would be cut by more than $200 million, representing about an eighth of the $1.58 billion they will receive in the current fiscal year.
“None of us here today are satisfied with an unemployment rate that remains too high; with an economy that remains too sluggish,” Malloy said in his address. “Connecticut families have had to buckle down, make tough decisions, pay their bills, make sacrifices and find compromise, and at the same time keep doing whatever they can to invest in their future. And so must their government.”
Headlining Malloy’s presentation were calls for the state and the University of Connecticut to inject an additional $2 billion over 10 years into the UConn 2000 program, and for the state to invest $200 million over the next decade into the Bioscience Connecticut initiative previously announced by the Malloy administration.
The “Next Generation Connecticut” plan would begin in the 2015 fiscal year with the addition of $17.4 million in operating funds and $105 million in capital funds to what was initially authorized for UConn 2000, while funding for the bioscience initiative would begin with $10 million installments in the 2014 and 2015 fiscal years.
Other economic development initiatives that would be funded through the capital budget include the Small Towns Economic Assistance Program, which would receive $40 million over the two-year budget, and the Small Business Express loan program, which would receive $100 million.
Additionally, the Department of Economic and Community Development would receive $100 million annually to continue to provide low interest loans to attract and retain businesses in Connecticut.
Joseph Brennan, senior vice president of public policy for the Connecticut Business & Industry Association, said spending cuts and investment are necessary.
“The only true way we can deal with the state’s economic condition is to improve the economy,” Brennan said. “We have to spend dollars wisely and focus on growing the state’s economy. That’s the only way we can deal with the state’s fiscal problems.”
- Patrick Gallagher contributed to this article.
[Editor’s note: This article has been updated from an original version, which was published Feb. 5. A version of this article appears in the Feb. 11 print edition of the Fairfield County Business Journal.]