With the state facing a $3.5 billion budget hole and the legislature unable to reach a budget agreement, Gov. Dannel Malloy put forth a revised budget which offers a mix of smaller tax increases and municipal cuts. The governor’s "compromise" budget offers some mandate relief to municipalities but would require towns to pay a portion of teacher pensions, albeit less than his original budget proposal.
Governor Dannel Malloy released his executive order allocating state funds to towns and cities on Friday, zeroing out education funds for 85 towns across Connecticut. The order also eliminated payment-in-lieu-of-taxes for hospitals, colleges and state owned property, and casino revenue grants.
Connecticut spent more money than it took in for 10 out of 13 years, according to a long-term state analysis by Pew Charitable Trusts. Overall, Connecticut was one of only eleven states that were consistently in the red because they “carried forward deferred costs of past services, including debt and unfunded public employee retirement liabilities, which could constrain their future fiscal options,” the report said.
On the same day that state employee unions announced the ratification of Gov. Dannel Malloy’s concessions deal by union rank and file, House Republican Leader Themis Klarides, R-Derby, held a press conference saying the concessions deal is “tying the hands of the Connecticut taxpayers for the next ten years.”
Reports surfaced Monday about a tentative deal between Gov. Dannel Malloy and the state employee labor unions to achieve $1.5 billion in concessions over the next two years and extend the state employee contract to 2027. However, a five year contract extension will mean Connecticut will be saddled with the union deal, negotiated by Gov. John Rowland, for as long as most people have mortgages.
Healthcare costs for retired state employees are projected to surpass the healthcare costs for current employees for the first time in 2017, according to the governor’s budget report.