Connecticut Faces Budget Impasse, Major Spending Cuts Loom

By Joseph De Avila Features Dow Jones Newswires

Connecticut lawmakers have hit a budget impasse that if unresolved could lead to deep spending cuts.

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Connecticut Gov. Dannel Malloy, a Democrat, said he doesn't expect the Legislature to pass a two-year budget before the current fiscal year expires on Friday. He called on the Democratic-controlled Legislature to pass a "mini budget" for a three-month period to buy lawmakers more time.

"It's clearly in everyone's best interest," Mr. Malloy said. "Doing nothing will make things worse."

But Democratic Speaker of the House Joe Aresimowicz said Tuesday he and the rest of the Democratic House caucus aren't convinced that a mini-budget is the right answer. It is a temporary spending plan that only delays making painful decisions, he said.

Mr. Aresimowicz said he would only agree to vote on a mini budget "when I see the groundwork, the parameters or the foundation to what could be a two-year biennium budget that moves the state of Connecticut forward."

Connecticut faces a two-year budget hole of $5.1 billion dollars. A new labor agreement signed by public-union leaders and the Malloy administration on Sunday would help reduce the gap to $3.53 billion. Rank-and-file union members still need to approve the deal.

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If no temporary budget is approved by the Legislature by Friday, the governor said he would issue an executive order to keep state operations running and will slash funding for social services, mental-health and addiction services and education.

"They are going to be bad," Mr. Aresimowicz said of the spending cuts. "But the lesser of two evils is not good enough for the state of Connecticut."

State Sen. Len Fasano, the top Republican in the state Senate, criticized the Democrats for not having a full budget ready to vote on before the end of the fiscal year.

"Connecticut is at a fiscal crossroads," Mr. Fasano said. "Inaction is not what we should be doing."

Republican House Minority Leader Themis Klarides said it was too early to tell if her caucus would support a mini-budget.

"We are in the middle of analyzing that now," Ms. Klarides said.

Write to Joseph De Avila at joseph.deavila@wsj.com

(END) Dow Jones Newswires

June 27, 2017 17:34 ET (21:34 GMT)