Still Time, but Budget Solution Up in the Air
With less than a week to go in the 2016 legislative session, it’s still up in the air whether there will be a deal to close the budget gap in fiscal year 2017 –and set the state on a more sustainable fiscal path–before the May 4 deadline.
This has been a very unusual year as Democratic legislative leaders and the Governor have not been negotiating the budget together, and multiple proposals have been put forward, including a second proposal by Governor Malloy.
Driving the budget scramble this year have been state tax revenue projections that continue to change—and fall short of expectations—and what the governor has called a “new economic reality” in the state.
This week, legislative Republicans offered a plan to address Connecticut’s fiscal situation, and Democratic leadership followed a few days later with their version of a new budget.
Governor Malloy started things off earlier in the month with the first plan to eliminate the deficit, at that time $930 million.
And even though each plan differs from the others in many ways, there are also similarities that should provide a solid foothold for a compromise.
“While we’re encouraged that proposals put forward by the Governor, Democrats, and Republicans all avoid tax hikes, the final budget plan should also avoid one-time savings and one-shot revenues,” said Joe Brennan, CBIA president and CEO.
“All year, we have consistently called for long-term spending reforms–reforms that will stabilize the state’s finances and generate the confidence needed to attract and retain businesses and create jobs.
“It’s now time to take the best ideas from all three proposals and pass a state budget that embraces those reforms.
Lawmakers face a difficult challenge, but the only way to grow Connecticut’s economy is by making state government more efficient, more effective, and more affordable.”
Immediately after the now estimated billion dollar-plus gap in fiscal year 2017 are multi-billion dollar deficits projected for the next two fiscal years, according to the non-partisan Office of Fiscal Analysis.
CBIA appreciates the efforts from all parties involved and remains hopeful that a budget agreement—with sustainable reforms—will be reached before the end of session.
The time for Connecticut state lawmakers to act is now, with the state facing even greater budget deficits in the near future.
For more information about state spending, contact CBIA’s Louise DiCocco (203.589.6515) | @LouiseDiCocco
For more information about state taxes, contact CBIA’s Bonnie Stewart (860.944.8788) | @CBIAbonnie
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