Malloy criticizes spending in 2019 budget, but signs it anyway

Connecticut Gov. Dannel P. Malloy addresses the House and the Senate as the legislative session ends at the State Capitol, Thursday, May 10, 2018, in Hartford, Conn. (AP Photo/Jessica Hill) Connecticut Gov. Dannel P. Malloy addresses the House and the Senate as the legislative session ends at the State Capitol, Thursday, May 10, 2018, in Hartford, Conn. (AP Photo/Jessica Hill) Photo: Jessica Hill / Associated Press Photo: Jessica Hill / Associated Press Image 1 of / 1 Caption Close Malloy criticizes spending in 2019 budget, but signs it anyway 1 / 1 Back to Gallery

Gov. Dannel P. Malloy signed on Tuesday a bipartisan budget deal passed by the General Assembly last week, but he chastised lawmakers for spending too much and not doing enough to reduce future state deficits.

The budget adjustments that will take effect July 1 put the state on track to spend more than it can afford, Malloy wrote in a letter to legislators Tuesday.

“This new budget adjustment spends $197.2 million more than the original budget for Fiscal Year 2019,” he wrote. “It restores and expands various health and human service programs, outpacing benefits provided to levels well above those in our neighboring states and resulting in some of the most generous benefits in the nation. Critically, it does so without making the accompanying difficult decisions to reduce spending in other areas of the budget in order to afford these benefits.”

Although lawmakers tackled cuts scheduled to hit in July through millions in one-time revenue, they did little to address future deficits, Malloy said. As for nearly $800 million in deficits this fiscal year and next, lawmakers tapped the state’s emergency reserves to paper them over, instead of deploying the deficit mitigation plan Malloy laid out in December 2017, the governor lamented.

“We now face out-year deficits of $1.96 billion in Fiscal Year 2020, growing nearly $600 million per year thereafter, and we leave the budget reserve fund at $1.16 billion by the end of Fiscal Year 2019,” Malloy wrote. “This is significantly below what is needed to meet the challenges of the next recession, which, by many measures, is overdue.”

Malloy’s own budget adjustment proposal left $1.35 billion in deficits in 2020, growing by about $150 million over the next two fiscal years.

An early Republican budget proposal also made payments toward out-year deficits by allocating some money to the Rainy Day Fund, teacher retirement systems and health plans.

The final budget did include a payment for teachers’ health care, said House Majority Leader Matt Ritter, D-Hartford. Both parties want to reduce climbing pensions, but Democrats prefer to develop a comprehensive plan attack the problem next year, instead of a one-time payment.

“In January of next year, one of the biggest issues will be what we are going to do with the teachers’ retirement fund,” he said.

Democrat and Republican legislative leaders reached the budget deal for the 2019 adjustments hours before the close of the legislative session on May 9 at midnight. The Senate gave the plan their unanimous support, and the House voted 142-8 to approve it.

Many lawmakers of both parties had some of the same objections to the budget the governor has, Ritter said, but they supported the document in its totality — especially with the prospect of many cuts to municipalities and transportation bearing down July 1.

Senate President Pro Tempore Martin Looney, D-New Haven, defended the spending contained in the budget.

"The recently passed bipartisan budget adjustment invests in our economy, restores funding for core services, protects seniors, rejects cuts to towns and local education, funds transportation projects, and eliminates fare increases and service cuts for buses and trains,” he said in statement Tuesday. “The bipartisan budget accomplishes all of this while not increasing taxes and putting over $1 billion in the state’s Rainy Day Fund.”

But, like the governor, he acknowledged there is room for future improvement.

"We must continue to make progress in order to balance our compelling needs with the realities of our revenue structure,” he said.

Ritter agreed.

“In the second year of the budget, it’s really, really hard with a short session to move and do very large policy issues,” he said. “Some of those larger things, sometimes they require an election. The second year of a a biennium budget is meant for adjustments.”

emunson@hearstmediact.com; Twitter: @emiliemunson