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Legislative session doesn't clear up
uncertain fiscal outlook
http://ctmirror.com/story/16317/legislative-session-doesnt-clear-uncertain-fiscal-outlook
Gov. Dannel P. Malloy downplayed long-range deficit forecasts
when the legislative session opened in February, noting there was time for the
state's finances to improve.
But after a
spring marked by declining revenue projections and a handful of questionable
cost-cutting moves, legislators from both parties conceded Thursday that the
state's fiscal outlook emerged from the session as murky as when it entered.
"I
worry about the state's finances all the time," Malloy
told reporters one day after the session closed. But "I think financially
we're still in a pretty good place."
Malloy spent
the last month of the session urging reporters to keep some perspective. He
inherited a $3.67 billion deficit built
into 2011-12 finances -- about one-fifth of all spending-- when he took office
16 months ago. The shortfall he and legislators just closed with seven weeks
left in the fiscal year was no larger than $285 million, barely over 1
percent.
The governor
said he's more worried about the ongoing European debt crisis and its impact on
Connecticut
exports, and more importantly, on Wall Street.
More than
one-third of Connecticut's
income tax stream comes from capital gains, dividends and other
investment-related income, and it has rebounded sharply and more quickly than
other components of the state's tax system following past recessions.
But that
hasn't been the case this time.
And the Dow
Jones Industrial Average, which stood at 12,883 points when the session opened,
and shot over 13,200 by mid-March, has fallen gradually since then and closed
Wednesday at 12,835 -- barely changed from its early February standing.
State fiscal
analysts, who already had downgraded last summer's revenue forecast in October
and January, did so again in April -- a month when state income tax deadline
filings often offer the first hints of new revenue growth.
Malloy,
whose original $20.7 billion proposal for
2012-13 was projected to run $424 in deficit by 2013-14,
agreed with legislators to slice $186 million off that plan. But given the declining revenues, the new
budget still is on pace for more than $400 million in red ink 14 months from
now.
But
Republican legislative leaders argued that thanks to some gimmicks Malloy and
majority Democratic lawmakers used in lieu of true spending cuts, state
government's long-term fiscal outlook is more unstable than it was in February.
"One
party government doesn't work," Senate Minority Leader John
P. McKinney, R-Fairfield, said Thursday. "It's given us a
budget that's out of balance, that's not honest and that doesn't work."
The new
budget, which takes effect in February, makes $54 million originally earmarked
for transportation available for other purposes with two moves:
A $30
million municipal grant program to help communities fund road work will be put
on the state's credit card next year, rather than paid with operating cash as
it is now.
And major
bonding for long-term road and other infrastructure repairs will be delayed,
freeing up $24 million that was supposed to cover interest and other
transportation debt costs.
Can the
state afford to delay another bond issue? Should town aid remain on the credit
card year after year? Reversing these practices will add another $54 million to
the long-range deficit.
"It was
this governor who said no more tricks, no more gimmicks," House Minority
Leader Lawrence F. Cafero,
R-Norwalk, said. "We have a deficit that will grow in the out years."
The new
budget also forecasts saving $50 million by tightening eligibility and limiting
nursing home coverage in a Medicaid program that serves poor adults who don't
have minor children. The changes include limiting enrollment to people with
assets below $10,000, excluding a house and car, and counting family income in
determining eligibility for applicants who are under 26.
Some of the
governor's fellow Democrats on the Appropriations Committee have questioned how
much savings an asset test can produce, since it's not clear how many people in
the program would be excluded if an assets test were imposed. There is no asset
limit now in the program, known as Medicaid for Low-Income Adults, or LIA, and
the Department of Social Services doesn't collect information on applicants'
assets.
But Senate
Democratic leaders said that while state government still has fiscal
challenges, the Republicans' doom-and-gloom approach reflects partisan politics
than economic reality.
"By no
means do we have a robust economy -- anywhere in the country," said Senate
President Pro Tem Donald E. Williams Jr., D-Brooklyn.
But Williams
noted that when Democrats raised $1.5 billion in new
state taxes in 2011 to close a huge deficit, Republicans accused them of taxing
excessively in order to build ensure surpluses in future budget. "A year
ago the Republicans were saying we had done too much," he said. "It's
not as if we're looking at a $1 billion surplus this year."
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Unemployment Benefits End For 11,000 by Christine
Stuart | May 14, 2012 5:30am CtNewsJunkie.com Posted to: Business | Jobs | Labor
This weekend about 11,000 people currently receiving
unemployment benefits received their last check. Continue reading "Unemployment Benefits End For 11,000" »
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The Things They Didn’t Fight About by Hugh McQuaid |
CTNewsjunkie.com May 11, 2012 2:34pm
Posted to: Jobs | State Capitol | Veterans Affairs House Minority Leader Larry Cafero, House Speaker Chris Donovan, and Majority Leader
Brendan Sharkey In a legislative session fraught with battles over the death
penalty, medical marijuana, and contentious negotiations on education reform,
it’s easy to overlook areas where everyone seemed to find common ground. Continue reading "The Things They Didn’t Fight About" »
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May 10, 2012
By Keith
M. Phaneuf and Jacqueline Rabe Thomas, Arielle Levin Becker and Jan Ellen Spiegel
The day after the
annual legislative session ends is typically a time for all sides to declare
victory, lament defeat, or spin one into the other. Below,
our list of winners and losers from the 2012 session.
Not everything
that didn’t get done is dead; legislators are expected to return for a special
session in the coming weeks to vote on budget implementation bills that could
incorporate proposals that didn’t get through in the regular session.
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May 9, 2012
Key measures
needed to implement the next state budget and an overdue fix to a
debt-riddled anti-pollution program were earmarked for a special session Wednesday
even as lawmakers scrambled to pass more bills before the midnight adjournment
deadline.
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May 8, 2012
As the
Senate voted 22-13 to give final approval late Tuesday to a revised $20.5
billion budget for next year, both parties saw state finances on the cusp of a
major change.
There was no
agreement on the nature of that change: Democrats see the budget closing small
deficits and preserving vital services until a recovery, while Republicans
predict that gimmicks in the plan mean another looming budget crisis.
Read more
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May 8, 2012
The House of
Representatives voted early Tuesday to approve a revised $20.5 billion budget
for the next fiscal year that preserves most of Gov. Dannel
P. Malloy's initiatives for education and nonprofit social services while
closing a $200 million-plus shortfall in current finances.
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May 8, 2012
After five
months of Gov. Dannel P. Malloy insisting that a
souring fiscal outlook wouldn't derail one of his biggest campaign promises,
the oft-pledged conversion to Generally Accepted Accounting Principles
officially landed on the political back-burner early Tuesday.
Both the
governor's budget director and the House chairwoman of the legislature's
budget-writing panel conceded that the first payment tied to the GAAP
conversion was sacrificed to help solve the current budget deficit.
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May 7, 2012
By Keith
M. Phaneuf and Jacqueline Rabe Thomas and Arielle Levin Becker
Gov. Dannel P. Malloy and Democratic
legislative leaders used a mix of programmatic cuts, borrowing and a raid on
transportation and other special funds to preserve nearly three-fourths of the
governor's proposed education spending.
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May 3, 2012
The Senate
Thursday overwhelmingly stymied a bid by Connecticut's
judges to remove their salaries from political debate, dramatically scaling
back a measure on a new judicial compensation study panel.
Senators
from both parties said lawmakers should be able to vote on raises, Republican
Sen. John Kissel of Enfield, saying, "We have a unique role
as a legislature to control the power of the purse."
Read more
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May 2, 2012
Though Gov. Dannel P. Malloy is trying to see the fiscal glass as half
full, key legislators tied to budget talks conceded this week that many of
Malloy's top initiatives may have to be scaled back, delayed, or cut
altogether.
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May 2, 2012
Key
Democratic lawmakers have bristled at the governor's proposal to scale back a Medicaid
program that serves some of the poorest adults in Connecticut. But in light of new budget figures released this week
showing that the state has a nearly $200 million budget deficit, some said
they're willing to consider changes.
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May 1, 2012
Republican
legislative leaders say that Gov. Dannel P. Malloy's
plan to divert the state's long-term debt payments to close the swelling
current budget deficit won't play on Wall Street.
Why? Because
just two months ago the state cited its efforts to pay down its debt as
evidence that it was getting its fiscal house in order.
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May 1, 2012
Connecticut no longer will be
dry on Sunday. With the governor committed to signing the bill into law, the
Senate voted 28-6 Tuesday to give final legislative approval to a measure ending
the state's longstanding ban on Sunday liquor sales.
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April 30, 2012
Despite
vowing during the campaign not to use the state's credit card to cover its
operating costs, Gov. Dannel P. Malloy announced late
Monday he would divert more than $220 million dedicated last year to pay off
debt to close a growing deficit in the current budget.
And a new report showing plunging
tax revenues opened a huge projected deficit in Malloy's budget plan for next
fiscal year, jeopardizing new initiatives for school districts and nonprofit
social services that the governor unveiled just three months ago.
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April 30, 2012
One of
Connecticut's largest public employee unions is trying to rally support in the
waning days of the General Assembly session for a study of whether state
government should offer a retirement plan to private citizens.
But a key
lawmaker behind the proposal conceded that the chances of passage this year are
poor with the legislature scheduled to adjourn in less than two weeks.
Read more
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April 27, 2012
A proposal
to give more than $300,000 in state assistance to a New Haven community center
with ties to the Communist Party was pulled abruptly off the State Bond
Commission agenda Friday.
And while
the governor, whose budget office sets the agenda, insisted the item was tabled
only because the New Haven
People's Center wasn't ready to use the funds, a key Republican called the
proposal an inappropriate use of state funds.
Read more
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April 26, 2012
The state
House of Representatives overwhelmingly approved a bill Thursday legalizing
liquor sales on Sundays and holidays starting July 1 and modestly easing liquor
price controls -- though far less than proposed by Gov. Dannel
P. Malloy.
The measure, which passed
116-27 and now heads to the Senate, creates a new task force to study liquor
pricing rules and also increases the number of package stores a permittee may own.
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April 25, 2012
While
gubernatorial candidate Dan Malloy pledged repeatedly to dive into a new
budgeting system based on honesty and transparency within moments of taking
office, Governor Malloy waded more gradually into Generally Accepted Accounting
Principles.
And now,
plagued 16 months later by sluggish revenues, a small-but-growing deficit and
reluctant legislators, Malloy may not get to dip his toe in the GAAP
pool.
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April 20, 2012
Faltering
state income tax revenues left Gov. Dannel P. Malloy
reporting his largest budget deficit to date on Friday.
And unless
tax receipts reported this week by nonpartisan legislative analysts improve,
Malloy's budget plan for next year -- including a state employee pension fund
fix and increased education aid to towns -- could be out of balance now and
headed for more than $500 million in red ink by 2013-14.
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April 20, 2012
The House
approved a controversial proposal to give collective bargaining rights to
certain home care workers and daycare providers Friday night, a matter that has
galvanized union supporters and opponents, people with disabilities, child care
providers and critics of Gov. Dannel P. Malloy.
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