Connecticut Governor Dannel Malloy delivered his State of the State address Wednesday to the General Assembly on its first day of the new legislative session. In his address, Malloy outlined his budget proposal for the next fiscal year.
He’s proposing across-the-board cuts to state agencies, cuts to municipal aid, and a cap in state spending. Malloy’s proposal would cut spending by about $570 million in the $20 billion-dollar budget, a cut of almost three percent.
"We cannot both constrain spending with a cap and assume government will continue to grow unchecked every year," he said. "I have previously offered this as a proposal to the General Assembly, but this year we have to act. Otherwise we will be forced, year after year, to either cut spending or look for additional revenue."
Malloy said there’s a mismatch between state spending projections and what the state receives in revenue. He said the state projects a constant growth of 5 percent in spending when revenues only grow approximately 2 percent.
"Connecticut state government must reset our expectations of what we can afford, how we provide services, and how we save for our priorities," he said. "It won’t be easy and, often times, it will not be politically popular. However, it is absolutely necessary."
Malloy also said that the state has failed to save enough money to pay for the pensions of its retired workers and now has one of the worst funded pension systems in the nation.
Ben Barnes, Malloy's budget director, said the proposed budget cuts are a result of reduced state revenues, including the personal income tax. Barnes is blaming slow wage growth for the drop in anticipated income tax revenues.
Barnes said the governor's revised budget, which awaits negotiations with the Democratic-controlled legislature, does not raise taxes.
Democratic and Republican legislators are voicing concerns over Malloy's proposal for giving agency heads more latitude in deciding where to reduce spending.
Senate Majority Leader Martin Looney, a Democrat, said that lawmakers are concerned Malloy's plan might weaken the legislature's prerogative to make certain budgetary decisions. He said a 1969 law helped to ensure fiscal parity between the legislative and executive branches.
Senate Republican Leader Len Fasano calls Malloy's proposal "reckless" for reducing discretionary agency accounts by 5.75 percent. He said it's the legislature's responsibility to examine the policy implications of spending reductions.
Malloy told lawmakers that he has "no desire to diminish the General Assembly's right to set policy."
