Committee Hikes Spending in Revised State Budget

The legislature’s Appropriations Committee this week approved a revised, $19 billion state budget (over $22 billion including Medicaid) for fiscal year 2015 that spends $12 million more than what Governor Malloy earlier proposed.

Although the committee proposes a modest increase over the governor’s proposal, it’s still an increase—and made possible only by again using some budget maneuvers.

The budget carries forward $60 million in surplus Medicaid dollars from the current year budget and applies them to Fiscal 2015. It also takes $65 million in higher education spending off-budget ($5 million more than the governor’s proposal).

Last year, the governor asked for, and it was approved by the legislature, taking Medicaid off budget to circumvent the state’s spending cap. With the Medicaid spending, the budget would have been $22 billion. 

Shifting spending offline to make the budget work is fiscally unwise because it creates holes going forward that taxpayers will have to fill in some way, and it increases the budget’s baseline.

What’s more, Connecticut taxpayers need a state budget that is more, not less, transparent.

The maneuvers also work against the intent of the state’s spending cap, which is to keep state spending within the ability of taxpayers to afford it.

And with significant budget deficits projected for the next several years, belt-tightening would have been more appropriate. CBIA testified that it recognized the Appropriations Committee would make changes to the budget, but urged the panel to stay within the original proposal’s bottom line.

Overall, the committee’s proposal maintains and makes only small changes to the priorities of the governor, including the hiring of 443 new state employees (37 more than the governor proposed) and increases in social services spending.

Approved in a straight party-line vote (with Democrats supporting and Republicans opposing), the committee’s spending package stays just $700,000 under the state’s spending cap next year.

Next, the Finance Committee is expected to finish its revenue-side work on Tuesday, April 1. Lawmakers and the administration will then negotiate the budget’s final form over the next several weeks before it is voted on by the entire General Assembly. The legislative session will adjourn at midnight on Wednesday, May 7.

CBIA continues to encourage policymakers to control the increase in state spending and continue to lean government services in order to avoid the need for harmful tax increases.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 | bonnie.stewart@cbia.com | @CBIAbonnie