Revised Budget Targets Governor’s Priorities
Governor Malloy’s revised state budget for the second year of the biennium reflects his education, fiscal and job creation-priorities.
In a briefing before the governor’s State of the State message, budget director Benjamin Barnes said, “This budget reflects our commitment to grow jobs, maintain fiscal discipline and responsibility, and fix our public schools.”
The revised budget increases state spending by about $330 million, or 1.6%, over levels approved by lawmakers last year, which is 3.2% over estimated spending.Because of declining state tax projections, Governor Malloy has already used his executive authority to trim the current state budget by $79 million.
In January, the Office of Fiscal Analysis said general fund revenues were down nearly $95 million this fiscal year and projected a $144.5 million deficit at year-end. Although the administration asserted that the state would finish the year in the black, spending will be have to be monitored closely to ensure that the budget stays in balance to avoid any additional tax increases.
Most of the spending increases are for improving the state’s public education, reforming the state’s pension program for public-sector employees, and maintaining “safety net” public services.
The governor’s proposal for a $20.729 billion budget for fiscal year 2012-2013 is projected to fall $5.9 million under the spending cap, said Barnes, who is secretary of the Office of Policy and Management.
While under current spending obligations the budget would surpass the spending cap in subsequent years, he added, the administration would act to keep that from happening.
“We will continue to honor the spending cap,” said Barnes, and “reduce expenditures on an ongoing basis to live within the spending cap [in order to] produce surpluses in the outgoing years.”
Education spending would increase by $128 million. The greatest share of that increase would help fund the state’s Education Cost Sharing grants, most of it would go to the state’s lowest-performing school districts–called Alliance Districts–within the governor’s reform proposals.
Barnes explained how the additional dollars for education follow the governor’s priorities for:
- Expanding early childhood education: $12 million
- Turning around low-performing schools and districts: $24.8 million
- Promoting school-choice models such as charter and magnet schools: $22.4 million
- Recruiting talented teachers and leaders: $13 million
One of the biggest challenges to Connecticut’s economic future is funding the state’s obligations for public-sector retirement benefits. The governor is proposingthat the state increase the size of its regular annual pension payments and make additional payments to achieve 80% funding of the account years ahead of schedule, and to deflate a $4.5 billion final “balloon” payment due in 2032.
The governor cited the success of the business incentives approved in the October special session. His revised budget continues funding for the $516 million package of loans, grants and other programs mainly geared toward small businesses in Connecticut.
The revised budget includes some spending to address recommendations made by the state’s Two Storm Panel after the damage visited upon Connecticut last year. About $7.5 million will go for more tree-trimming, regional training for better coordination of storm response, and a pilot energy microgrid project.
Among other capital investments in the revised budget:
- $90 million for bridge improvements
- $62.5 million to improve public housing
- $50 million to modernize state information technology
As the governor announced earlier in the week, he is proposing the further consolidation of state agencies, reducing their count from 59 to 52, and the elimination of 25 boards and commissions. When Governor Malloy took office, there were 81 state agencies.
Also, under the revised budget, the count of authorized (but not necessarily filled) state employee positions for fiscal year 2013 will be 1,216 lower than under the budget approved last year. While the administration is leaving many positions across state agencies unfilled by design due to the budget crunch, the governor is adding auditor positions in the Department of Revenue Services.
To see the complete midterm budget revisions and presentations, visit the governor’s website. For more information, contact CBIA’s Pete Gioia at 860.244.1945.
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