CT Dems’ Reaction:

“After months of insisting that Republicans could magically balance the budget by increasing spending and reducing revenues, Themis Klarides has finally admitted that, when it comes to budgeting, one plus one does not equal three.

Indeed, under Klarides’ Republican plan, Connecticut would roll back much of the progress we have made on transportation and community development. The bottom line is that if we want to make Connecticut competitive, we need to repair our crumbling roads, bridges, and rails and invest in the strategic transportation initiatives that the Democrats have enacted. As usual, when faced with the hard decisions on how to strengthen our economy and create jobs – the Republican plan moves Connecticut backwards.” – CT Dems spokesman Leigh Appleby

CT Mirror: Klarides: Cut future transportation, local aid initiatives

By: BY KEITH M. PHANEUF AND MARK PAZNIOKAS | October 13, 2015

House Minority Leader Themis Klarides, R-Derby, called Tuesday on the General Assembly’s Democratic majority to reduce their new initiatives on transportation and municipal aid in order to restore cuts recently imposed on hospitals and services to persons with disabilities.

The transportation and municipal aid initiatives were adopted this year and set to begin in the next fiscal year. Klarides said the new municipal aid and transportation appropriations effectively form a reserve fund that is bound to eventually fall victim to future budget deficits.

Klarides’ made her willingness to cut the programs known during a press conference with Senate Minority Leader Len Fasano, R-North Haven, to once again call for a special session to revise $103 million in budget cuts ordered last month by Gov. Dannel P. Malloy.

With the GOP otherwise refusing to offer a list of alternative cuts, Klarides’ stand on the municipal and transportation spending was off script. Fasano was noncommittal, calling her idea premature — something possibly to be taken up in negotiations with Democrats.

The news conference followed a piece of political theater: The delivery of petitions calling for a special session.

The leaders delivered to the secretary of the state’s office the signatures of every Republican legislator. For the petitions to trigger a special session, the GOP would need a majority of the General Assembly — meaning signatures from at least 12 Democrats in the House and four in the Senate.

Fasano said a demand from Democrats for specifics from the GOP was part of a “foolish, childish game.”

“We’ve been through that so many times with this governor. Even the people in their own party have put suggestions out there that the governor slapped away without conversation,” Fasano said. “I think we ignore the governor. I think we sit with the Democratic legislators and say, ‘Let’s get in a room and do this.’ If you are serious, call a special session and let’s do it.”

The GOP is trying to keep public attention focused on the Democrats’ management of the state’s fiscal difficulties. Next year, they hope to pick up legislative seats in a presidential election year for the first time since in decades.

Despite Klarides’s call for cutting a municipal aid program that was a priority of Democratic legislative leaders, she and Fasano said they hope to work with Democratic legislative leaders to find alternatives to Malloy’s emergency budget cuts.

“God knows what kind of a situation we will be in” months from now, Klarides said. “The problem is compounding every single day.”

The problem Klarides cited is two-fold:

State finances are coming in about $100 million per year below expectations this year – a trend that also threatens future budgets.
And nonpartisan analysts say finances, unless adjusted, would run $927 million in deficit in 2017-18, the first new budget after the 2016 state elections. The declining income tax revenue trend pushes that deficit to about $1 billion.
On paper, the new budget also dedicates a portion of state sales tax receipts for transportation and municipal aid – but there is no immediate payoff.

The transportation program actually receives about $30 million less from the general fund than it was supposed to this fiscal year. Transportation comes out ahead by $96 million next fiscal year and by $195 million in 2017-18.

Similarly, the state starts saving sales tax receipts for municipal aid now, but doesn’t deliver significant funding to cities and towns until next fiscal year. Communities are supposed get $229 million in 2016-17, and $288 million in 2017-18.

Both Klarides and Fasano said they fear the revenue problems and other issues will open further deficits this year and next. The projected $1 billion shortfall awaiting in 2017-18 is more than double the extra money that same year for transportation and municipal aid combined.

The executive director for the Connecticut Conference of Municipalities, Joe DeLong, said Tuesday that local leaders are well aware of the looming deficit and its ability to affect the municipal aid initiative.

“I won’t go so far as to say they are skeptical they will see that money, but they are very concerned,” DeLong said.

“All of that money is not going to end up getting there,” Klarides said, calling it “hypocrisy” for Democratic legislators to campaign on these budget initiatives.

Malloy and his fellow Democrats also reneged on a wide array of tax breaks approved in the last term and scheduled to start after the state elections in November 2014. But Democrats canceled or postponed tax breaks — worth almost $500 million in total over two years — aimed at consumers, corporations, insurance companies, single income tax filers and the working poor.

Rather than renege on these latest budget promises after the 2016 state elections, leaders should use what resources are available to protect the poor and disabled, Klarides said. Democratic leaders “need to grow a backbone.”

Klarides specifically pointed at $105 million in sales tax receipts that is supposed to be reserved for cities and towns this fiscal year – but not delivered until 2016-17.

Fasano was more circumspect, saying afterward it would be premature to endorse Klarides’ call to reduce the municipal aid initiative, adding that all ideas should be reserved for legislative negotiations.

Democrats reacted cooly.

“As legislative Democrats prepare to announce our alternatives to the governor’s cuts, Republicans once again have nothing substantive to offer,” said House Speaker J. Brendan Sharkey, D-Hamden. “Today’s political stunt is merely a continuation of Republicans putting political grandstanding ahead of serious policy.”

Senate President Pro Tem Martin Looney, D-New Haven, noted that the alternative budget the Republican caucuses proposed last spring ultimately fell more than $200 million out of balance due to declining revenue projections. The GOP never re-balanced its plan, which already was controversial, relying on the state securing $630 million in annual savings from union concessions.

“I wish it were shocking that Republicans want to have a special session without actually proposing a balanced budget,” Looney said. “Their failure to produce a comprehensive, balanced alternative budget demonstrates their total lack of commitment to actively participate in the budget process all the way to a responsible conclusion.”

Gabe Rosenberg, spokesman for the House Democratic Caucus, said Klarides’ proposal showed “Republicans are getting more desperate everyday.”

Rosenberg added that “the Democratic leadership of the House has made it very clear that they’re committed to relieving the property tax burden on Connecticut’s families.”

“If the threshold for action is perfect economic conditions, then we will never be able to provide Connecticut residents with meaningful property tax savings or provide businesses and commuters with safe and reliable transportation system,” added Senate Democratic Caucus spokesman Adam Joseph. “The Republicans are essentially asking people to pay higher property and car taxes and sit in traffic.”