HARTFORD, Conn. -- Connecticut lawmakers will try again Friday to work out a biennial fiscal 2018-19 budget that is already three months late.
An expected overnight vote did not materialize amid tweaks and retweaks to a $41 billion plan that would feature a wide range of niche taxes and fees in lieu of increases to broad-based taxes; a rush to comprehend a massive document on short notice; and talk of dissent among Democrats who hold a narrow edge in the House of Representatives.
“The paperwork itself, the document is going to be 1,200 pages and is not going to be ready until five in the morning,” House Speaker Joe Aresimowicz, D-Berlin, told reporters around 1 a.m.
The would-be spending plan, produced after hectic day at the state capitol complex, features tax rates on hospitals and hotel rooms and adds new taxes on cellphone bills and vacation homes in the hopes of plugging a deficit of roughly $3.5 billion.
The deal would have also boosted funding for municipalities, including distressed Hartford, whose mayor Luke Bronin has threatened a Chapter 9 filing.
Gov. Dannel Malloy, a Democrat working with a narrow 79-72 party edge in the House of Representatives and an 18-18 split in the Senate, has run the state through two executive orders since July 1. Malloy has warned that an even more austere order, hitting school districts even harder, would take effect Oct. 1 without a budget.
Connecticut's late budgets and budget imbalance have triggered the wrath of bond-rating agencies, which imposed three general obligation downgrades in May.
Moody’s Investors Service rates Connecticut’s general obligation bonds A1, while S&P Global Ratings and Fitch Ratings assign A-plus ratings. Kroll Bond Rating Agency rates them AA-minus.
On Thursday afternoon, the tax-revenue joint finance, revenue and bonding committee approved nonpartisan fee estimates by a 26-25 vote.
“Don’t smile, because that’s going to be the next thing to be taxed in the state of Connecticut,” said Sen. Scott Frantz, Republican chairman of the state legislature’s finance committee.
Budget passage may not be enough to placate bond rating agencies critical of Connecticut in recent years, according to Frantz.
“I think of the biggest risks that we have is that we don’t put together a budget or we put together a budget that is not satisfactory, one that’s consumer, individual, family and business unfriendly and the rating agencies pick up on that,” Frantz said in an interview at the legislative office building.
Moody's had called the budget standoff a credit negative for local governments. "With state legislators at an impasse, some small state aid grants are not flowing to local governments," said Moody's.
