Connecticut’s Senate debated the state’s proposed two-year, $37.5 billion budget into Monday evening, two days before the end of the session and one day after bleary-eyed House members approved the spending plan right before sunrise.
The Democratic majority shifted roughly $6 billion in expected federal funding from the proposed $43.8 billion spending plan expected in federal aid to a separate account.
“In a tough budget year, we’ve done good work with respect to holding the line on revenues while funding critical needs,” said Sen. John Fonfara, D-Wethersfield, chairman of the finance, revenue and bonding committee, early in Monday’s debate.
Gov. Dannel Malloy was pleased. “No budget is perfect and this budget required many tough cuts, many tough choices and hard compromises. We still have a long way to go. But this budget shows that we’ve got our priorities straight,” Democrat Malloy said after the House advanced the budget with a 95-48 vote at 5:15 a.m. Sunday.
Democrats have a 99-52 majority in the House, 22-14 in the Senate.
Also over the weekend, the Senate approved $1.6 billion in state bonds over 10 years for University of Connecticut technology enhancements by a 29-5 vote. The money, under the Next Generation Connecticut capital improvement program -- part of the UConn 2000 infrastructure program -- will pay for new and refurbished laboratories, Internet technology upgrades, and housing and parking renovations.
According to the bill, the general fund debt service cost associated with issuing this amount is $2.4 billion, assuming that the bonds are issued for a 20-year term at a 5% interest rate.
Malloy called the budget balanced under generally accepted accounting principles and said it fully funds the state pension system. But it further delays the state’s conversion to generally accepted accounting principles into the 2015-16 fiscal year, after the governor’s first term. Malloy campaigned in 2010 on instant conversion to GAAP.
A late provision authorized the Connecticut Lottery Corp. to add Keno terminals to bars and restaurants. Lawmakers pulled a plan to auction electric service for customers of Connecticut Light & Power and United Illuminating Co.
The $6 billion transfer prompted Republican lawmakers to accuse their opponents of circumventing state constitutional spending limits.
“The spending cap is like a yellow caution light, but we keep blowing right through it, 80 miles per hour, faster and faster on the pedal,” said Sen. Rob Kane, R-Waterbury.
In 1991 the General Assembly passed a statutory spending cap amid backlash against the passage of a personal income tax. Voters approved the cap as a constitutional amendment one year later. It specifies that general-budget spending not exceed the previous year’s spending by more than a given percentage.
“The rating agencies are going to have a problem with borrowing to pay for general fund expenses,” said Sen. Scott Frantz, R-Greenwich.
Moody’s Investors Service rates Connecticut’s general obligation bonds Aaa3, while Fitch Ratings and Standard & Poor’s assign AA ratings.
“Look at the states around us, Massachusetts and New York, and even the states down south,” Frantz added. “They’ve weathered the financial storm and their economies, while not exactly booming, are close to that level. Our recovery is anemic and we can’t be passing these kinds of budgets.”
