Leaders debate Malloy budget in Stamford
Published 10:55 am, Sunday, March 27, 2011
STAMFORD -- State legislative leaders disagreed over Gov. Dannel P. Malloy's proposed tax hikes and spending plans, but Republicans and Democrats alike supported his plan to win concessions from state workers at a breakfast meeting Friday.
"We are behind the eight-ball fiscally, changes must occur," said Senate President Pro Tempore Donald Williams, D-Brooklyn. "They have to step up to the plate," he said of the employees unions.
Malloy is looking for $1 billion in concessions from the state's employee unions as part of his overall budget for the next two years to cut the state's $3.3 billion debt.
Republican House Minority Leader Larry Cafero of Norwalk said he supports Malloy's efforts to win concessions from state labor unions. "I believe he believes it is an attainable goal," he said.
The current system he added is, "Absolutely, without any doubt unsustainable. If we continue on the path we will be broke. In fact, I would argue that we are currently broke."
Senate Minority Leader John McKinney of Fairfield expressed doubts about Malloy hitting the goal, calling it a very "aggressive number."
To demonstrate the point he said that the state could save $791 million dollars this next year but it would take a number of hard to make policy changes.
Those sweeping shifts to get to almost $800 million in savings would have to include increasing the age of retirement, making employees pay more in pension contributions, requiring one furlough day per month, a hard freeze on salaries for two years, cap the cost of living adjustments, reduce the work week to 35 hours, increase employee health premiums, suspend longevity payments and increase prescription co-pays.
"That is a very aggressive number. And if the governor cannot reach it, his budget falls and craters. We have to wait and see," McKinney said.
Democrats Donovan and Williams said they fully supported Malloy's budget that would cut almost $2 billion in spending and employee givebacks and $1.5 billion in new taxes.
But Cafero pointed out that another tax increase after one approved just two years ago is too much for residents to bear.
"Just two years ago the legislature raised the taxes $1.6 billion, so to layer on top of that another $1.9 billion without making cuts," Cafero said. "I believe that until we do the cutting side of the three-legged stool we should not look at the revenue side, which we have relied on so heavily in the past."
McKinney also said Malloy's budget proposal relies too heavily on new taxes.
He said Malloy's proposal is 58 percent tax increases, 30 percent labor concessions and 12 percent spending cuts.
McKinney pointed out that while Malloy says he would cut close to $800 million in spending; he is really only cutting about $438 million, he said according to the state Office of Fiscal Analysis, and that is not enough.
And when you include more federal dollars coming to the state, Malloy's budget really represents a 2.4 percent spending increase over the current year, McKinney said.
McKinney also railed against a more than $500 million budget surplus built in to the governor's proposal over the next two years.
"Why, why are we increasing taxes, putting people out of business?" McKinney asked, pointing out the anticipated hit to the boating industry.
Williams defended the increased spending by saying that the state is finally getting much-needed increases in federal tax dollars to spend.
"It strikes the right balance between tax increases and reform and concessions and budget cuts," he said. "We cannot afford a pathway in Connecticut that undermines a recovery, that contributes to greater unemployment and job loss. Gov. Malloy has set the right path and I want to support that fully."