Connecticut Gov. Dannel Malloy on Wednesday introduced his two-year, $43.8 billion budget, which includes a $200 million bioscience initiative and $1.5 billion in capital funds to benefit the University of Connecticut.
The spending plan calls for $21.5 billion in fiscal 2014 and $22.3 billion in fiscal 2015.
“The budget I’m proposing today keeps us firmly in balance. Slowly, deliberately and sometimes painfully, we’re building a more sustainable future for Connecticut,” Malloy told the General Assembly in Hartford.
Malloy, delivering his second two-year budget after taking office in January 2011, is coming off a year in which Connecticut needed a special legislative session to seal a $365 million budget gap.
Also last year, Moody’s Investors Service downgraded the state’s general obligation bonds to Aa3 from Aa2, citing high combined fixed costs for debt service and post-employment benefits relative to the state’s budget.
Fitch Ratings, Standard & Poor’s and Kroll Bond Rating Agency rate Connecticut AA.
State Treasurer Denise Nappier said last week that the state’s pension funds generated an investment return of 13.47% for 2012.
Malloy’s proposed budget cuts $862 million off current services in the first year and more than $1 billion in the second to offset increased contributions to pensions and to convert the state’s accounting to generally accepted accounting principles, or GAAP.
He also proposes exempting most motor vehicles from the property tax, although municipalities worry about lost revenue.
The proposal increases education funding by $152 million, with more than 90% of that funding targeted to low-performing districts. It also includes $15 million for a local bridge program, to provide grants for cities and towns to fix infrastructure.
The governor justified the UConn-related expenditures as essential to attract and retain technology-related jobs. He cited the precedent of luring Jackson Laboratory in 2011 from Maine to Farmington, adjacent to the UConn Medical Center.
“We’ve seen what’s possible in this industry,” said Malloy. “But this isn’t just about Jackson. It’s about Alexion in New Haven and Durata in Branford – about the many other great companies and entrepreneurs throughout Connecticut.”
The General Assembly and the State Bond Commission would have to approve the UConn funds.
Republicans quickly criticized Malloy, a Democrat.
“Once again, Gov. Malloy’s rhetoric does not match reality,” said GOP party chairman Jerry Labriola of Wallingford. “This budget spends too much, borrows too much, taxes too much and cuts too little. It is a formula for continued economic stagnation and joblessness.”
The legislative session is scheduled to end June 5.