Connecticut's House of Representatives on Friday is scheduled to debate a nearly $20 billion state budget for fiscal 2017, one day after Senate approval.
The spending plan, down 4.4% compared with the original budget the legislature passed, would eliminate about 2,500 state jobs and plug most of a roughly $1 billion deficit that has drawn the attention of bond rating agencies.
The Senate's 21-15 vote late Thursday was along party lines, with the Democrats holding a slim majority. Lawmakers have been in special session, having failed to pass a budget during the regular session that adjourned last week.
Gov. Dannel Malloy, a Democrat, urged passage earlier Thursday, saying the budget bill made more than $820 million in long-term cuts.
"As part of the budget agreement, the state will change how it does business, and give residents and businesses the predictability they seek as government works to live within its means," he said.
In March, Moody's Investors Service and Kroll Bond Rating Agency revised their outlooks for Connecticut's general obligation bonds to negative from stable. Standard & Poor's continued the negative outlook it imposed a year earlier, while Fitch Ratings reaffirmed its stable outlook.
Moody's reaffirmed its Aa3 rating. Fitch, S&P and Kroll all affirmed AA ratings.
Malloy said future budgeting would calculate growth only through fixed cost drivers including debt service, Medicaid, pensions and other entitlements.
All other budgetary components, he said, would assume a budgeting format in which only fixed costs would undergo the same "current services" calculation, resulting in more realistic estimates of future spending.
Republicans argued that contrary to Malloy's assertions of no new taxes, the so-called implementer bill -- an owner's manual of sorts for the state budget -- enables municipalities to impose additional levies at entertainment and recreation venues.
"While it is true that the state won't be the one collecting this tax, it is still a tax hike that towns can seek to make up for the deep municipal cuts found in this budget," Sens. Len Fasano, R-North Haven, and Rob Kane, R-Watertown, said in joint statement.
Republicans also said that steep cuts to education funding and municipal grants will create huge holes in municipal budgets, forcing cities and towns to seek new revenue.
