UPDATED: State budget bill passes House and Senate with veto-proof vote
This story has now been updated with response from each of Darien's elected representatives at the state level.
After going without a budget for several months, this afternoon a state budget bill passed in Hartford. This will end the long stalemate in which a number of public services and offices struggled while Governor Dannel Malloy ran state finances via executive order.
The budget bill passed the Senate last night by a margin of 33-3, and passed the House of Representatives this afternoon by a margin of 126-23. All of Darien’s representatives in Hartford voted for the budget bill.
The bill was created through a bipartisan effort and did not include input from Malloy, as he was shut out of most talks over the past few weeks.
While the budget is several hundred pages in length and many smaller details are still to come, it is possible to get a broad stroke of major changes. One of the major tax hikes in the bill is on hospitals, amounting to over $340 million. However, the state then returns that money to the hospitals, and by doing so qualifies for additional federal reimbursements to net out $137 million ahead. Tax credits for middle class families are being reduced. An additional tax on cigarettes and tobacco products of 45 cents per pack will go into effect, on par with tobacco taxes in New York. An additional fee for ridesharing services such as Uber will be added as well, as will a tax on fantasy sports betting beginning in 2018-19. Along with the ridesharing fees, a $10 fee for motor vehicle registrations will be added in order to support state parks.
Current teachers will see their pension contributions raise from 6% to 7%, and those contributions will total over $50 million in the biennium. That money will go to the state general fund.
The tax increases amount to over $500 million, although without the hospital tax, the amount is about $150 million this year and $200 million next year.
The Education Cost Sharing Grant will be cut by just over $30 million, and no municipality will see their ECS money zeroed. The 30 lowest performing districts see no cuts at all in ECS, while every other town sees about a 5% cut. A new ECS formula to determine aid levels will begin being used next year, and that $30 million will be restored to the ECS total pool. The new formula is said to be designed to send funding to towns that cannot reliably raise enough tax money locally to pay for their own public school needs.
The city of Hartford, who has said it needs significant aid from the state in order to avoid bankruptcy, will get help. $40 million in aid this year will go to Hartford, and the city will have to restructure debt, with the state guaranteeing a refinance in order to help the city get a good interest rate.
For Darien specifically, town aid in 2018 will amount to $941,916. In 2017 town aid totaled $927,018. The ECS grant in 2017 was $406,683, and in 2018 will drop to $386,349. The following year in 2019 under the new formula, Darien will is slated to receive $412,838. The Board of Education budgeted to receive no ECS money at all this year or last year, as most budget proposals in that time zeroed out ECS money to affluent towns.
State Representative William Tong was happy and relieved to see the bill pass.
“I know that it took much longer than it should have, and for months, there was too much politics and not enough problem solving. But despite very long odds, my colleagues and I did something very few thought we could do – we put politics aside, and negotiated a true, bipartisan budget,” Tong said.
Tong was very happy with what the budget accomplished in terms of making major structural changes, saying, “This budget does not have any major tax increases, including no changes to the income tax, no changes to the sales tax, and no changes to the real estate conveyance tax; cuts billions of dollars in state spending; reforms state employee salaries, healthcare and pensions to make them more affordable and in-line with private sector salaries and benefits; imposes a hard cap on state spending and bonding (borrowing); avoids major cuts to state education funding for Stamford and Darien schools; and empowers the state to help small businesses and larger employers and accelerate job growth here in Connecticut.”
Tong was among those who were in on the budget talks early, without party leaders, in order to start making real progress on budget talks. “I was honored to lead a small group of moderate centrists from both parties, who met privately at first and without our leadership, to focus on breaking the impasse. We did not stop being Democrats and Republicans, but we worked closely with each other as partners to break the logjam. And as we talked, our leadership began to talk, and together we came to an agreement few thought possible,” Tong said.
Democratic First Selectman candidate Rob Richards was also happy with the budget. “The bipartisan budget passed last night is better than I expected. All the budget proposals that could have threatened Darien's fiscal stability were either mitigated or removed. Darien is poised to receive some level of education aid and more importantly, there will be no mandated municipal contribution to Teachers’ Pensions. This is a huge plus for Darien,” said Richards. The bipartisan effort was also something that Richards was happy to see, saying, “I'm still reading through some of the details but as far as I can tell I am impressed with the results. This budget restores some of the faith I’ve lost in our legislative process and gives me hope that we can come together and do the right thing.”
Republican incumbent First Selectman Jayme Stevenson was also thrilled to see a veto-proof budget passed.
“I couldn’t be happier that we have a veto proof budget. I know it’s not perfect, I know there are things that both caucuses want to work on in the next legislative session, but it’s imperative that we got a budget, we’ve gone too long without one. Darien has been blessed in that we haven’t been, to date, too negatively impacted. But I know many towns have been, and this will give them welcome relief, and will give us all some certainty over what we can expect or not expect going forward,” said Stevenson.
Stevenson also spoke about Darien receiving ECS money. Even though some towns directly send ECS funds to their school system, in Darien ECS grant money is actually a town revenue stream. So the ECS funding will go to the town general fund. Stevenson it would, “be used when necessary to offset any future expenses, or be used to accumulate our general fund reserve. We’ve been tapping into our reserve, and we want to be sure we are keeping a healthy savings account that keeps our bond rating stable and strong.”
Special education funding goes directly to reimbursing the school district for money spent. The schools will file for excess cost reimbursement in the spring, and that money will go directly to the school.
The Connecticut School Finance Project has reviewed the new formula for ECS and Stevenson said she looks forward to reading their findings. Stevenson was particularly happy to see special education funding not be affected.
“It’s always been my position that we were proactive in cutting our ECS funding to zero as an acknowledgement that we understand that we do have some obligation to help be part of the process to right the ship in CT. We know there are municipalities that have a greater need than we do. But I really held the line on special education reimbursement, and I was very vocal about that with [State Representative Terrie Wood] and [State Representative William Tong].”
Stevenson spoke about other facets of the budget that she was happy to see as well, such as a modest amount of money for roads, which is bonded money.
“I’m very pleased with the numbers. I think that Darien fared fairly in this budget. I am more pleased to see some of the policy changes that are also incorporated in the budget. These are things that have been asked for for a very long time and will finally move forward,” said Stevenson. She would mention the cap on state spending and borrowing, the increased threshold in the prevailing wage, the legislature now voting on union contracts as positives in terms of structural change. There was also relief that municipalities would not be shouldered with paying for teacher pensions.
“This begins the process of making a better Connecticut,” Stevenson said, adding, “when the problems are as big as they are, no one is going to walk away happy. We all have to understand our role in that collective sacrifice.”
State Senator Carlo Leone also was happy about the passed bill. Leone considers it a good starting point for the legislator going forward, saying, "It is a good start, and I am sure in coming and future sessions, there will be continuous movement as the incremental gains begin to provide more momentum for consistent changes towards the positive." Leone also said that this budget could be part of a new normal.
"Many of the social safety net services could have and continue to require more assistance, but we are now living within our new "normal"means," Leone said, adding that, "Everyone has both positive and negative reactions to the new reality. Overall, it is the positive aspects, the need to resolve and move on bipartisanly that wins the day."
Leone would also comment on the discussions themselves, and the notable exclusion of Malloy. Leone downplayed the absence of the governor, saying Malloy still had an impact.
"Even though he was not in the room, leadership realized what the administration needed in order to insure his signature for final passage. As stated on the Senate floor, I am hopeful that it will be a positive conclusion."
State Representative Terrie Wood responded positively to the budget bill passing. "The budget we voted on yesterday is a bipartisan budget and one that should give some hope to people in our state. It is far from perfect, but is is a good start on the road to turning our state's fiscal situation around. There are a number of initiatives that Republicans have sought for years and they are included in this budget. Initiatives that make the structural changes many in our state support," Wood said.
Wood would point to a number of changes mentioned by her fellow representatives as evidence of real change, particularly the $1.9 billion hard cap on bonding and the hiring freeze on the state workforce. Wood also mentioned parts of the budget that she believes will help keep residents from leaving the state.
"It eliminates income taxes on those receiving social security income of $75,000 or less, or $100,000 or less if filing jointly. This will be an encouragement for those retired to consider staying here rather than fleeing to other states. The estate tax exemption will be phased in over three years to the federal level, another incentive for those retired," Wood said. Wood also mentioned the ECS funding being leveled and special education reimbursement remaining as it has been as great news for municipalities who depend on that grant money.
Wood did mentioned the agreement with state unions in July as a place where not enough was done to help the state's fiscal condition. "The SEBAC ( state union organization) vote in July tied our hands with state employees salaries and benefits for ten years. Salaries and benefits that far exceed other states and the private sector that are simply unsustainable. Democrats stood in support of this agreement unanimously, save for state Rep. John Hampton of Simsbury) Many in our state did not support this agreement and would have liked to have seen changes made -- albeit this was outside the budget process," Wood said.
State Senator and Senate Majority Leader Bob Duff released a statement via the Connecticut State Democrats website. ““As a result of this bipartisan budget, Connecticut will continue to make critical investments in innovation, manufacturing, bioscience, green energy and other emerging industries while holding the line on taxes and making substantial structural changes in order to achieve long term savings,” said Duff, adding, “Once this budget becomes law, communities and school districts across the state will have the resources they need to provide services and educate our students. I want to thank the legislative leaders from both parties for their hard work and commitment to delivering a bipartisan budget.”
The full text of Duff’s statement is available here.