HARTFORD – On Wednesday, Governor Dannel Malloy formally presented his biennial $41 billion budget proposal to a joint session of the House and Senate. The proposal aims to increase state spending by more than $1.7 billion and bond $3.1 billion despite recent reports that Connecticut’s budget deficit will reach an estimated $2.5 billion over the next two years.
State Representative Christopher Davis (R-East Windsor & Ellington), who serves on the Finance, Revenue and Bonding Committee, questioned the Governor’s decision to increase state spending and borrowing while Connecticut’s large deficit and bond rating have already hurt the state’s chances for additional job growth and economic development.
“Despite the Governor’s best assurances, the bottom line is that our state is still spending more than we ever have before, taxing more than we ever have before, and borrowing more than we ever have before,” said Davis. “Even with Moody’s downgrading our bond rating just last year, the Governor’s proposal to borrow billions of additional dollars will leave our future generations with more debt to pay and put our state at greater financial risk. The Governor also proposed increasing our spending by over 9% within the next two years. This can hurt our state in the long-run, especially if we continue to ignore structural changes to reduce the $2.5 billion deficit and the ongoing shortfalls in revenue.”
Rep. Davis says he applauds the Governor for his passion to make investments into Connecticut’s future, but he expressed that the Governor’s handling of state finances is misleading and masks the real fiscal dilemma Connecticut faces by referring to the Governor’s attempt to reduce GAAP liability by bonding and moving about $900 million in spending outside of the restrictions of the state’s constitutional spending cap.
“Given our current financial situation, we have to ask ourselves if this is the right time to be spending and borrowing more money,” said Davis. “Our increasing budget deficit and depleting bond rating weakens our opportunity to bring more jobs to our state. It’s time for us to concentrate on getting our state finances in order – without using faulty accounting methods to hide our real financial problem.”
Other aspects of Malloy’s budget include:
- Extension of the expiring electric generation tax, likely to result in more than $80 million passed on to families and businesses in the utility bills.
- Extension of the corporate tax surcharge that impacts companies ability to hire and retain employees.
- Eliminates using casino revenues for town aid projects and puts those funds into the General Fund.
- Creates new state agencies and departments despite a growing deficit.
- Bonds $1.5 billion in FY 14 and $1.6 billion in FY 15.
- Finances $750 million to reduce the GAAP deficit and pushes out debt payments until 2016.
- Pushes off Economic Recovery Notes payments. $300 million in bonding that will be moved from the next two years into the outyears.
- Implement Tax Amnesty program for $25 million.
- Eliminates $24.9 million in school transportation and adds a $5 million regionalization grant
- Eliminates $94 million in municipal revenue sharing grants (AKA manufacturing machinery and equipment grant / property tax relief).
Rep. Davis represents the 57th district covering East Windsor & Ellington