Malloy´s budget proposal: quick takes

It is finally here - Governor Malloy just presented his budget proposal. We knew it was going to be a tough budget year, so there are plenty of things to talk about and discuss.  We have a FESC meeting this Friday, 9.30 to 11,30 am, specifically to go over the whole thing and plan ahead. Make sure to come, and there is a lot to talk about.



On to the budget, then. Let´s start with the basics:

That said, some very early, very quick takes on the budget:


General notes:

  • The deficit is still a bit north of $1 billion. To close the gap, the Governor is relying in a mix of spending cuts ($590 million) and revenue increases (not exactly taxes, but close enough), mostly tax cuts promised for this year that will not happen, some tweaks to the sales tax that will increase revenue and money from a settlement with Standard & Poor´s from the financial crisis.
  • No layoffs, but a good deal of attrition in the states labor force; 300 positions, or a 2% workforce reduction in two years.

The Good:

  • Full day kindergarten for all children in the state.
  • If you like transportation (and you should) the budget has some very good news; the New Haven-Hartford-Springfield rail line is still on track, and there is quite a lot of investment fixing up Metro North, as well as some road projects. More information here and here.
  • Second Chance Society Initiative: some significant changes in criminal justice, including eliminating minimum sentences in some areas, reducing penalties for simple drug possession to misdemeanour and streamlined parole proceedings for non violent offenders.

The Bad:

  • The State EITC is not restored to 30% of the federal credit, and remains at 27.5%
  • Many important line items remain frozen: municipal aid and ECS funding, for instance, have not seen a nominal increase for the past few budgets, what amounts to a fairly real cut in the past few years.
  • Significant program cuts in the department of labor: STRIVE, Jobs Funnel and youth employment, among others, lose more than $5 million in funding.
  • The Department of Social Services got hit with big cuts:
    • Husky A adults earning above 138% of the Federal Poverty Line will be shifted to Health Access CT, and will have to pay premiums with federal subsidies (a $44.6 million cut).
    • The biggest hit, however, was on Medicaid reimbursement rates: $43 million to providers, $5.1 million to low cost hospitals, $4.3 million to ambulance services.
    • Healthy Start got zeroed out, among other programs, cutting $8.1 million.
    • The overall budget cut looks smaller because they are getting $55 million from new revenue: an update on the Hospital Provider Tax.
  • The Office of Early Childhood saw a slew of programs cut, including Help Me Grow, the Community Plans for Early Childhood and Family School Connection (about $2 million)
  • Some cuts on higher education: the Uconn block was reduced by $27 million, and Board of Regents saw cuts both on Transform CSCU ($12 million) and their block grant ($4 million). Remedial education pilots and funding are also being cut; we are trying to see exactly by how much.

The Ugly:

  • The budget really does not add up unless one assumes an increase in revenue to appear in the April budget report. It might be there (the economy is actually doing fairly well), but still. We will see.
Even more budget stuff:
The CT Mirrror has a lot more on where the cuts fall, the transportation projects, and where does the new revenue come from. More information in the Courant and CT News Junkie.  If you want budget numbers, we will keep you busy!

get updates