State budget stalemate taking its toll

‘Squeeze’ felt in towns, cities, nonprofits

HARTFORD » House Speaker Joe Aresimowicz said Thursday that if the Senate votes against a proposed labor agreement, “then we’ll never have a budget.”

The Senate is expected to vote Monday on the $1.57 billion in savings provided by state employee unions. The House voted earlier this week to approve the package 78-72, with only one Democratic legislator joining Republicans to vote against it.

There are three Democratic senators who have not decided yet whether they are voting for the union deal, and with the Senate tied 18-18, it means just one of them could kill it. A spokesman for the Senate Democrats confirmed Friday that they still plan to hold a vote Monday.

If the union deal and the $1.57 billion in savings is approved in the Senate, then Aresimowicz said they are fighting over about $200 million to $400 million that’s left in the budget.

Senate Republican President Len Fasano said he would like to see the union deal voted down and the legislature take over negotiations with the unions. He said he understands Aresimowicz has to go “all out to protect this union deal.”

However, he said, “it’s disingenuous to say it’s Armageddon if it’s not approved.”

Fasano said the General Assembly could get most of those labor savings back by negotiating the wage contracts on their own. They would have to wait until 2022 to get the changes to the health and pension portion of the agreement, but Fasano said that doesn’t mean they won’t be able to achieve the same amount of savings. He said according to the actuaries the changes they want to propose to the health and pension agreement after 2022 will actually save money in 2018 and 2019 because it would lower the pension liability.

Fasano said it’s not fair to scare lawmakers into voting for a deal.

“I don’t think leaders should scare people with falsehoods,” Fasano said.

Aresimowicz said Fasano wants the union deal to fail “so he can somehow benefit in 2018. It’s disgusting.”

Fasano said if that was true then all he would have to do is sit back and watch the Democratic Party try and piece together a budget on their own. That’s not what he’s been doing. Fasano said he’s had a handful of meetings with Democrats, including Aresimowicz, to answer questions about his budget proposal.

“I’ve been as transparent as I can be,” Fasano said.

Aresimowicz said he’s had his staff members talk to Fasano about his budget, but “it keeps coming back to the 2018 election.”

He said the reality is the Republicans don’t want to govern “and every time you invite them they fall back on these political promises they’ve made to their supporters, instead of governing.”

Meanwhile, the state still doesn’t have a two-year budget proposal and nonprofit organizations are feeling the squeeze, while municipalities will begin to feel much more of the pain next month.

Gov. Dannel P. Malloy has been operating state government on an executive order since July 1.

That means that funding for nonprofit providers has been scaled back and municipalities won’t be getting $78 million next week from sales tax receipts. The Office of Policy and Management has the option to advance cash to the fund, but it is refusing to do so until there is an agreement on how much money it will divert from the state sales tax to the Municipal Revenue Sharing Account.

That $78 million is in addition to the $30 million in town road aid, which municipalities didn’t receive in July.

But things could get worse if the budget stalemate continues past the end of September.

On Sept. 30, $181.6 million in state payments is to be made to municipalities for property they’re unable to tax. But no payments will be made without a budget. Municipalities have had to adjust as best they can for the unknown.

According to a survey by the Connecticut Conference of Municipalities, about 59 cities and towns have increased their budgets between 0.6 percent and 6 percent to account for what they expect will be a reduction in state aid. The tax rate increase for those communities has been between 0.8 percent and 9.39 percent.

Some communities have decided not to send out tax motor vehicle tax bills until they can determine whether it will be capped at 32 mills or 37 mills, based on a program instituted two years ago by the legislature.