By Keith M. Phaneuf

Democratic legislative leaders and Gov. Dannel P. Malloy made progress over the weekend toward a new plan to end the state budget standoff by week’s end — one that would abandon efforts to raise the primary sales tax rate of 6.35 percent.

The leaders said it was premature to say whether they also could avert any sales tax surcharge on restaurant transactions, but compromises proposed by the governor late last week have helped push lawmakers toward a consensus.

“I think we’re actually closer than we’ve been in a long time to actually having the possibility of closing this and having a product we can pass and the governor can sign,” said Senate President Pro Tem Martin M. Looney, D-New Haven.

The General Assembly begins the week just four days away from a potential budget nightmare. If a deal is not struck by Thursday, the Senate’s schedule may not accommodate another gathering until after Oct. 1 — when Malloy, absent a new budget, would impose huge cuts on municipal aid.

By Keith M. Phaneuf and Jacqueline Rabe Thomas

Gov. Dannel P. Malloy today proposed a major increase in state taxes on hospitals to leverage federal dollars, along with a modest sales tax hike, in a compromise intended to end a budget impasse that’s in its third month and has left Connecticut as one of the last two states without a budget.

“It has inflicted more harm than should be tolerated by any of us in positions of leadership, Democrat or Republican,” Malloy said of the impasse in outlining his plan. “The time for compromise is now and the proposal I put forward today represents just that.”

Revenue from these tax changes, a new sales tax surcharge on restaurant transactions and a series of smaller spending cuts, would enable Malloy to greatly scale back what has been a major point of difference with legislators: A plan to cut municipal aid and shift big teacher pension costs onto cities and towns.

But the governor still is insisting that the next two-year state budget redistribute education aid to help poor communities.

By Keith M. Phaneuf

Gov. Dannel P. Malloy announced today he would ease proposed municipal aid cuts and other cost-shifts onto cities and towns by nearly $775 million in an effort to end the state budget standoff that has extended 10 weeks into the new fiscal year.

Malloy, who will issue another revised two-year budget plan — his third — on Friday, released a few details one day earlier.

The governor, who said this week he would curtail his proposal to transfer teacher pension contribution costs onto municipalities, now wants communities to pay $92 million this fiscal year and $190 million in 2018-19. That’s $547 million less over the biennium than Malloy originally sought.

He also agreed today to scale back his proposals to reduce municipal aid considerably, restoring $137 million in the first year and $89 million in the second, or $226 million over the biennium.

By Mark Pazniokas

House Democratic leaders said today they intend to call a vote on a budget next week with or without a deal with Gov. Dannel P. Malloy and the Senate, a ploy to force wavering lawmakers to decide between an imperfect spending plan and the “cataclysmically worse” choice of forcing Malloy to slash municipal aid by executive order.

House Speaker Joe Aresimowicz, D-Berlin, said the arrival of Oct. 1 without a budget would guarantee cuts in municipal aid that would ripple through every public school in the state, instantly transforming a budget impasse into a full-blown fiscal and political crisis — with the blame laid at the feet of every lawmaker.

“We’ll make it very clear on the House floor, and I’ve said this before, If you are not part of the solution, you are voting for the executive order,” said House Majority Leader Matt Ritter, D-Hartford. “That’s the reality. That’s what’s going to happen.”

But missing from the scenario outlined by Aresimowicz and Ritter was a key element: What exactly would be in the budget up for a vote next week?

By Keith M. Phaneuf and Jacqueline Rabe Thomas

www.ctmirror.org

Gov. Dannel P. Malloy has offered a major compromise to end the state budget standoff, scaling back his proposed shift of teacher pension costs to cities and towns by half.

Malloy, who originally suggested communities cover one-third of the fastest-growing expense in the state budget, told The Mirror today he would accept their contributing only the costs tied to present-day teachers.

The massive-and-rapidly growing unfunded liability — compensating for decades’ worth of contributions not made by past governors and legislators — would remain the state’s responsibility.

And while the governor said he remains committed to a new, two-year state budget that does not “lead with revenue” to close major projected deficits, he is willing to discuss revenue options to hasten an agreement.

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