UPDATE This graphic provided by the state’s Office of Policy and Management shows Westport will see a $6 million reduction in state aid in the fiscal year beginning July 1. (CLICK TO ENLARGE) Office of Policy and Management graphic

By Keith M. Phaneuf

Gov. Dannel P. Malloy today unveiled a $40.6 billion, two-year budget that closes $3.6 billion in deficits by seeking $1.5 billion in labor concessions, imposing $400 million in annual pension costs on cities and towns, and scaling back tax credits for the middle class and working poor.

Gov. Dannel P. Malloy addresses the state legislature today. (CLICK TO ENLARGE) CTMirror.org photo

The plan, which would spend $20.1 billion next fiscal year and $20.5 billion in 2018-19, also dramatically overhauls the financial relationship between the state, municipalities and hospitals. It ends nonprofit hospitals’ long-standing exemption from local property taxation while increasing state payments to the industry, in turn generating more federal Medicaid dollars for Connecticut.

The pension fees and the hospital funding changes were designed not only to close major shortfalls in state finances driven largely by surging retirement benefit costs, but also to shield Connecticut’s financially distressed cities.

The labor savings target, which involves $700 million in the first year of the new budget and $800 million by the second, has an ugly alternative. According to Malloy’s budget director, Ben Barnes, the alternative would be to seek at least 4,200 additional layoffs.

By James Lomuscio

Next year’s police and fire department budgets seemed to please the Board of Finance as it pored over Westport First Selectman Jim Marpe’s proposed $79 million 2017-18 municipal budget Tuesday night.

Police Chief Foti Koskinas listens to Board of Finance members along with First Selectman Jim Marpe and Finance Director Gary Conrad. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com

The proposed police budget of $8,141,397 represents a 0.5 percent decrease over the current year, and the $9,110,386 proposed fire budget is down 0.7 percent.

The Police Department decrease does not factor in salary changes as contract negotiations continue. Officers have been without a contract since June.

Still the first responder overall budgets seemed on target with Board of Finance Chairman Brian Stern’s zero-base budgeting directive as the town girds itself against the state’s fiscal malaise.

By Keith M. Phaneuf

www.ctmirror.org

When state budget director Ben Barnes told reporters Connecticut had “entered into a period of permanent fiscal crisis,” he did so just 13 days after his boss, Gov. Dannel P. Malloy, had won the 2014 gubernatorial election with a polar opposite message.

While Malloy dismissed a major deficit forecast and pledged not to raise taxes, his Republican opponent, Tom Foley was even more upbeat about delivering tax relief and closing the deficit.

The challenge of wooing voters has taken on new dimensions as politicians increasingly are boxed in by Connecticut’s fiscal realities, and the 2014 gubernatorial campaign isn’t the only example.

In recent years, Democrats and Republicans in the General Assembly have accused each other of making unrealistic if not ridiculous promises that fly in the face of the state’s mounting debts.

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By Keith M. Phaneuf

www.ctmirror.org

There is no shortage of ideas on how Connecticut should not solve the fiscal crisis caused by its massively unfunded retirement benefit programs.

There are plenty who say state government cannot tax its way out of a problem expected to last 15 years or more, and to attempt to do so would cripple an already weakened economy.

This camp places most of its hope in slashing labor costs. Unfortunately, the fastest growing expenses in the current budget have nothing to do with present-day workers, whose benefits are very close to the national average. And even reducing expenses tied to present-day workers comes with plenty of complications.

A second approach holds some reductions must be made but there’s no hope deep spending cuts can do it all and that major tax increases are unavoidable. Too much of the budget is tied up in fixed costs, and a slash-and-burn approach only would destroy the state’s quality of life while still failing to balance the books.

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