Connecticut Democrats reach deal on late changes to budget; vote planned for Monday

Economic Indicators Associated Press

Democratic legislative leaders announced Friday they've reached an agreement with Gov. Dannel P. Malloy's administration on last-minute changes to the state budget that sparked strong criticism from major employers, including two that threatened to leave Connecticut.

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Rank-and-file lawmakers are scheduled to return to the Capitol on Monday for a special legislative session to vote on the changes, which House Speaker Brendan Sharkey, D-Hamden, said includes Malloy's proposal to roll back nearly $224 million of the planned $1.5 billion in tax increases over two years.

The two-year, $40.3 billion Democratic budget narrowly passed the General Assembly on June 3.

"We listened to some of the concerns raised by businesses about the taxes that were raised that were a concern to them," said Senate President Martin Looney, D-New Haven, adding how the leaders also tried to address concerns from their members about cuts to hospitals. Some hospitals have threatened to close clinics and lay off workers because of the budget.

The revised proposal includes an additional $15 million in each year of the budget for hospital funding. There is also more money for nonunion nursing homes. It's unclear whether that will be enough to prevent any closures or layoffs.

The eleventh-hour budget adjustments include elimination of a planned increase in the state tax on computer and data processing. It will remain at 1 percent. It also delays until January a proposal requiring corporations with a presence in Connecticut and other states to determine their tax liability based on the net income of the entire group.

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While lawmakers agreed with Malloy's plan to scale back the taxes, they did not grant him the authority to make across-the-board spending cuts — a proposal that was strongly opposed by human service providers who contend the budget is already bare bones and feared further reductions to services for the needy and people with mental illness and disabilities.

Sharkey said the new plan spreads about $25 million in additional spending cuts throughout the budget. Also, it reduces future pay raises to both union and nonunion state employees in the second year of the two-year budget. Additionally, it relies on some of the sales tax revenue dedicated in the budget for property tax reform and transportation infrastructure improvement. Sharkey said the move will not adversely affect either initiative, which Democrats contend make the budget "historic."

Both Sharkey and Looney said they had enough votes in their respective chambers to pass two bills that make budget-related changes. Malloy, also a Democrat, has yet to sign the main, underlying budget bill.

Rep. Antonio "Tony" Guerrera, D-Rocky Hill, who voted against the original budget, said he feels "much better" after learning about the changes during a caucus meeting on Friday.

"From what I heard, it makes this budget much better and I'm happy to see that, I really am," he said. "And I commend the speaker and the majority leader and everybody who came to the table on this to really look at this and really give some insight of what's going on out there."

Besides the budget-related bills, lawmakers are expected to vote Monday on a few others that were not approved in time during the regular session.