HARTFORD, Conn. - It took nearly four months of extra innings negotiations, but Connecticut lawmakers finally managed last week to pass a bipartisan tax-and-spending plan for the fiscal year that began July 1.
Now, all eyes are on Democratic Gov. Dannel P. Malloy, who was not part of the closed-door budget talks among legislative leaders, to see whether he will sign the two-year, $41.3 billion plan.
But it’s questionable whether a gubernatorial veto could scuttle the progress made toward finally ending the nearly four-month-long impasse. The massive, nearly 900-page budget bill cleared both the Senate and House of Representatives Thursday by large enough margins to override Malloy’s rejection should the lawmakers stick to their original vote.
Malloy has until Wednesday to sign or veto the budget. If he does ultimately sign it into law, the bare-bones executive order the governor has used to approve limited spending without a state budget will be scrapped. Delayed state payments to cities and towns are expected to immediately start flowing again, likely heading off school closures, teacher layoffs, credit rating downgrades and more program cuts.
If Malloy vetoes the plan, state lawmakers will have to return to the state Capitol for a veto override session. They would need 101 votes in the House and 24 in the Senate to overturn the governor’s action. On Thursday, the budget bill cleared the Senate by a vote of 33-3 and the House by a vote of 126-23.
Democratic Senate President Martin Looney, of New Haven, said Tuesday he hopes there will be a “collegial and consensus conclusion” to the lengthy impasse and Malloy will sign the budget.
The governor, who previously vetoed a Republican-crafted budget that passed the General Assembly in September with a handful of Democratic votes, has made it clear he has some problems with the latest proposal.
Malloy said Thursday that a tax on hospitals was written in a way that would make it difficult to guarantee the state could collect hundreds of thousands of dollars from the federal government as part of a complicated reimbursement arrangement. He and his staff urged lawmakers to fix the problem immediately, but that didn’t happen.
“This is a recipe for disaster and deficit - but it’s also completely avoidable,” said Ben Barnes, Malloy’s budget director. Malloy’s staff met Friday with legislative attorneys and staff to discuss the administration’s concern that the Centers for Medicare and Medicaid Services might not approve the tax, putting the state on the hook for hundreds of millions of dollars in penalties and lost revenue.
“This would have to factor into the overall consideration of the budget,” said Kelly Donnelly, Malloy’s communications director.
Lawmakers have taken the warning in stride, noting they are still technically in a special legislative session and can pass a new bill that would fix the problem, if it’s necessary. “If there is a problem,” said House Minority Leader Themis Klarides, R-Derby, “we will come in and make sure it gets fixed.”
If another vote should happen, however, it could spark calls for additional changes to the budget.
Donnelly said the governor’s staff was still analyzing the bill, “weighing its merits and faults.”
One potential “fault” for Malloy could be the $175 million diverted from several energy efficiency accounts funded by ratepayers through charges on their bills. In a statement released Tuesday, before the budget votes were held, Malloy warned such a sweep would be “tantamount to a tax on the backs of ratepayers,” urging lawmakers to avoid the damage such cuts might cause.
Both Republicans and Democrats raised similar concerns, while two groups representing the solar and energy efficiency industry have announced they are pursuing legal action to block the transfer of funds. The groups point out how 30,000 jobs in Connecticut are currently linked to those industries and “many hundreds” of people could lose their jobs if the money which helps reduce energy costs is moved into the state budget, rather than be used to encourage more people to pursue solar and energy efficiency projects.
Questions have also been raised about whether the calculations in the budget for how much money each municipality receives from the state accurate.