Malloy's budget leaves Connecticut lawmakers to find funding for transportation projects

Gov. Dannel P. Malloy is offering a two-year, nearly $40 billion state budget that ramps up improvements to Connecticut's aging transportation system but leaves it up to the General Assembly to come up with a way to pay for projects down the road.

The Democrat's plan, presented Wednesday to the Democrat-controlled General Assembly, calls for $112 million for transportation funding starting in 2018 but does not say where that money will come from. Ben Barnes, the governor's budget director, said there are limited options for raising that cash, including tolls and user fees.

But Barnes warned that tolls alone likely won't generate enough money.

"There are a number of revenues that could be used to fill that hole," Barnes told reporters before Malloy's noontime address to the legislature. "We look forward to having that discussion."

The budget, which will become the framework for budget negotiations with state lawmakers over the coming months, boosts spending by approximately 3 percent each year. Barnes said those increases are driven by state employee retirement costs and pay raises, debt payments and growth in social service caseloads, among other expenses.

There are no state employee layoffs or early retirement offers in Malloy's plan. However, the budget proposal does put the brakes on state hiring. Barnes said about 300 to 400 open positions in higher education and the executive branch will be not be filled this year under Malloy's proposal. He called it an "aggressive hiring lapse."

Barnes said he expects overall staff levels in executive branch agencies to be reduced by about 1 or 2 percent of the workforce by attrition.

Malloy crafted this budget amid projections of $1 billion deficits each year. Barnes said the plan is balanced by spending cuts, $36 million in anticipated revenue from a legal settlement and transfers from various funds. The plan does include some tax changes, including an eventual reduction in the current 6.35 percent retail sales tax rate to 5.95 percent. However, much of that change is funded through the elimination of various tax credit exemptions, including the exemption on up to $50 of clothing.