Word has surfaced that Governor Dannel Malloy and the Democrat-controlled legislature have agreed on a tentative two-year budget plan. The initial budget plan that the governor proposed, which would have broken the designated spending cap, proved unsuccessful. Under Governor Malloy's original plan, a new spending cap with higher limits was presented; however, the new spending cap required the support of three-fifths majority from both houses. To attain this majority, Malloy had to aggregate the votes from all 22 Democratic senators, including those who are fiscally conservative, which was impossible.
With this new, more reasonable budget plan, Malloy has agreed not to include any new taxes or exceed the spending cap that currently exists. To fulfill his goals, Malloy has considered an alternative counting method for Medicaid money in which Medicaid dollars would be recorded off the books, since the federal government will be paying for all Medicaid in Connecticut starting in 2014.
Due to the weakened economy, Malloy's simultaneous goals are difficult to accomplish, and they have created debate between Republicans and Democrats. Specifically, there has been much debate over changes in taxes and old tax laws that are set to expire in the coming years.
For one, the tax on electric generating companies has sparked serious discussion over the past several weeks. Democrats want to gradually end the tax, however, this poses problems because electricity customers will receive a greater tax burden during its gradual removal. Currently, it is decided that the tax will remain with a decreased amount, but this is not definite.
Several other taxes are still under discussion and a few budget cuts have yet to be made. Although all specifics within the budget plan are not determined yet, it is likely that Democrats in the legislature and the governor will come to a final decision. Lawmakers are scrambling to pass a budget plan before the session ends on June 5th. We are hopeful to hear good news from the Capitol until then!