After clash, ‘substantial' x4 progress on CT budget deal; ‘We're not going to raise taxes'

Yahoo

3 days ago

Only hours after a public clash, negotiators made major progress on a new, two-year state budget that could lead to a final vote as early as Monday.
House Speaker Matt Ritter of Hartford had tangled with Gov. Ned Lamont's administration to the point that Ritter threatened to pass a one-year budget. That would have broken a tradition lasting more than 30 years as the state always passes two-year budgets in order to look ahead for the fiscal outlook.
But after a logjam was broken, the one-year plan was essentially off the table Thursday.
'We made substantial, substantial, substantial, substantial progress,' Ritter said, repeating the word four times.
One of the reasons for the progress, he said, is that negotiators decided to pre-pay $200 million for the pension obligations for public school teachers that creates extra room under the spending cap and helps to balance the budget.
'The key to the budget deal will be the teacher pension,' Ritter said.
After numerous complaints at public hearings and private discussions this year, the public colleges will receive millions of dollars more than some expected. The University of Connecticut will receive $35 million more than the governor's proposal in the first year, even though that total is less than what the budget-writing committee had recommended. UConn would then receive an additional $10 million more in the second year, he said.
The Connecticut State University system, which includes the 12 community colleges, will rely on its large fiscal reserves in the first year, which had been recommended by the budget committee. CSCU would then be increased by $10 to $15 million higher in the second year.
But Ritter stressed that the totals for the second year, which would start in July 2027, could change.
'For people that get too worried about year two, we come back and revisit things and see where we are,' Ritter told reporters, adding that he had delivered the latest news to UConn President Radenka Maric.
Ritter also stressed that the final details were still being written by the nonpartisan staff — a laborious process that traditionally takes 48 hours after a handshake agreement.
'There is no deal,' Ritter said late Thursday morning. 'I want to be very clear. We have not had that handshake.'
On the tax side, a proposal to increase the capital gains tax that had been favored by liberal Democrats will not be in the final deal. The legislature's finance committee voted to raise taxes on the state's wealthiest residents by imposing a capital gains surcharge of 1.75 percentage points on top of the 6.99% rate that the wealthiest earners currently pay, meaning that the new rate would be 8.74%.
But Lamont strongly opposed that idea as he has during his entire tenure as governor.
Lamont said he too was happy with the overall progress on the two-year, $55.5 billion spending plan.
'We're going to have a good budget,' Lamont told reporters at the state Capitol. 'It's going to be done on time. We're not going to raise taxes. We're going to be able to honor the commitments to the most vulnerable. A budget is a reflection of our values. I think we're in a good place.'
In a trade-off with Lamont, the final deal is expected to include the creation of a new child tax credit for the first time in state history. House Democrats prefer the child tax credit instead of Lamont's proposal to increase the popular property tax credit on the state income tax to $350 per tax filer. As such, the credit would remain at $300 per year.
While the final version of the bill has not been released, the latest Democratic proposal calls for a permanent, refundable credit of $150 per child for a maximum of three children, or $450 per year. That represents a sharp drop from an original proposal of $600 per child for an overall total of $1,800 per year. With various pressing needs on the tax and spending sides of the complicated state budget, lawmakers say they are often unable to award as much tax relief as they would like.
Democrats have been pushing for the full tax credit to be available to single parents earning up to $100,000 per year, heads of households earning up to $160,000 per year, and couples filing jointly earning up to $200,000 per year, according to an analysis by the legislature's nonpartisan fiscal office. The credit would start on Jan. 1, 2026 and would save families a combined $82.7 million per year.
Besides the budget, another key bill in the final days of the session is the so-called 'implementer' that provides specific details to implement the $27 billion annual spending plan. In the past, the 'implementer' has sometimes turned into a hodgepodge of legislation that failed in various committees and then was jammed into the implementer at the last minute, creating bills that were so large that legislators would often miss key provisions that were purposely buried in obscure language.
Ritter described it as a 'tight implementer,' adding, 'So far, it's the best one I've seen.'
House Republican leader Vincent Candelora of North Branford was not pleased because the budget talks have been between Lamont and top-level Democrats who control both chambers of the legislature.
'When Republicans are not in the room, bad things happen,' Candelora told reporters Thursday. 'I think we are going to see that this budget is going to be cobbled together with gimmicks to end-around the spending cap. … I want a real, two-year budget that is based in reality.'
Breaking with the tradition of not spending precious debate time on bills that will be vetoed, Ritter said the state House of Representatives will be debating a controversial bill on awarding unemployment compensation to striking workers. The workers would become eligible after striking for more than 14 days.
The tradition was adopted so that bills would not take up precious time in the final days of the legislative session, which ends at midnight Wednesday, when some bills will be left on the table with no time for a vote.
Ritter has long maintained the tradition, but this year will be an exception.
'This is year three. It's time to have that issue addressed one way or another,' Ritter told reporters. 'We have tried very hard in the House to find compromise, including last year's bill. We're going to let it go on the board. … I think there's a solution there somewhere, but we haven't been able to find it. That's the one exception we're going to make to that rule this year.'
Known for accurately counting votes, Ritter said there would be at least 76 votes to pass the striking workers bill, but he said the House Democrats cannot muster 101 votes to override Lamont's expected veto. The 102-member House Democratic caucus has at least 20 moderate members who can break ranks with their colleagues and block any veto overrides.
Candelora blasted the bill, saying it was purposely written to help unions.
'I think it's sending the wrong message to the state of Connecticut,' Candelora said. 'If you think about all the bills we've done, we do labor bills every other day in this chamber, but we don't have conversations about how to grow Connecticut's economy. So we continue to see bills that are choking out our businesses in the state of Connecticut for a very small population of union workers. … We have abused our unemployment system in Connecticut.'
Democrats have been under extreme pressure on the bill from union members, who have helped Democrats win elections for decades and can also find candidates to force primaries against incumbent Democrats.
The bill passed this week on strict party lines by 24-11 in the state Senate.
While the precise timing was still up in the air, the bill will likely be debated on Friday or Saturday – when the House will be in session as they rush to finish their work by June 4.
Christopher Keating can be reached at [e-mail]