CT Senate, House GOP issue revised ‘no new taxes’ budget proposal

Connecticut Senate and House Republicans have jointly released a revised two-year state budget proposal with no new taxes that party leaders said would restore funding for education and core social services and provide stability for towns and cities.

The revised budget rejects Gov. Dannel Malloy”™s proposal to shift teacher pension costs onto towns and cities, which would likely result in increased property taxes.

The GOP budget proposal combines elements of the Senate and House Republicans”™ multiple prior budget proposals, feedback from Democrats and factors in the legislature”™s passage of the state employee labor concessions deal that is now law.

The original Republican budget was first released in April and updated throughout the year as the state”™s financial situation changed.

“In this time of hardship, it is imperative that we send a clear message to the people of Connecticut that we are moving our state in a new direction,” said Senate Republican President Pro Tempore Len Fasano (R-North Haven) and House Republican Leader Themis Klarides (R-Derby) in a statement. “We cannot do that with a budget that increases taxes by nearly $1 billion and continues the same policies that have failed our state in the past.

“We believe it is in our state”™s best interest for lawmakers to come together and pass a bipartisan budget, which is why we have worked for months to try to negotiate a deal with Democrats that truly moves our state forward,” the Republican leaders added. “But Democrat legislators made it clear they would rather work with Gov. Malloy than their Republican colleagues and pass a budget that relies on the same policies that have failed our state in the past.”

The Republicans say that their budget proposal:

Achieves a “no new taxes” stance by not increasing or expanding the sales tax ”“ something that Malloy”™s most recent proposal does ”“ hospital tax or income tax. It also rejects the governor”™s proposal to shift teacher pension costs onto municipalities.

Reduces taxes by phasing in a tax exemption for Social Security and pension income for middle income families. In addition, the Republican budget also restores the entire $200 property tax credit for all qualifying families and individuals. Under Malloy”™s tenure, that tax credit has been reduced from $500.

Increases education funding via a revised Education Cost Sharing Formula that takes into account factors regarding Connecticut Coalition for Justice in Education Funding and Meskill court decisions, enrollment, poverty, wealth and number of English Language Learners, among other factors. The budget dedicates $33.6 million more to education in fiscal year 2018 and $136.6 million more in fiscal year 2019 and phases in a new formula over 10 years. It also establishes a council to analyze and make changes to the new formula within the next year if deemed necessary. In 2018 all cities and towns”™ base education cost-sharing grants would either be held harmless or gain more funding.

Provides municipal support and mandate relief to help municipalities achieve efficiencies, foster cooperation between school boards and local government, and pass savings on to taxpayers.

Restores and maintains funding for core social services and programs, including day and employment services for individuals with intellectual and developmental disabilities; Care4Kids; and the SAGA program that supports disabled residents who are unable to work, and funds school based health clinics and family resource centers.

Prioritizes the state”™s transportation needs and stabilizes funding without tolls or new taxes by implementing the Republican “Prioritize Progress” transportation funding plan, and stabilizes the state”™s Special Transportation Plan by dedicating transportation-related revenues to fund transportation needs and protects monies in the state”™s Special Transportation Fund from being diverted for other uses.

Funds state parks and tourism by transferring 1.5 percent of the current hotel occupancy tax to a new Marketing, Culture and Tourism account.

Reduces the size of the government by implementing overtime savings of 10 percent, a hiring freeze on non-24-hour nonunion positions and making cuts to the legislature such as reducing the number of legislative committees. The budget also makes targeted spending cuts, 10 percent reductions to certain agency accounts and rolls forward lapses made last year except for cuts to core services such as grants for mental health and substance abuse and youth service bureau funding.

Includes structural changes that roll out into future years to achieve significant savings. Those changes include such items as a spending cap, bonding cap, municipal mandate relief and other policy changes for long term savings.

The budget also implements pension reform beginning after the State Employees Bargaining Agent Coalition deal ends in 2027 to achieve $270 million in savings over the biennium from the following changes to state employee benefits: requiring workers to pay the national average towards their retirement benefit, eliminating cost of living adjustments until the fund balance of the state employee retirement system is deemed healthy by national standards, eliminating overtime from calculation of final average salary, ceasing the current practice which allows higher paid employees to receive a larger portion of their final average salary as lower paid employees.