Press Releases
05/11/2016
Statement from Governor Dannel Malloy
(HARTFORD, CT) - Governor Dannel P. Malloy today released the following statement:
"In February, I said we needed to change how we budget, that we needed to do things differently. This budget makes more than $820 million in long-term cuts, which helps mitigate long-term deficits. It's a good budget, and I urge the legislature to pass it.
"Ending the 'current services' budgeting approach as we know it is an important structural reform that I called for in February. It's also another critical part of our budget agreement. Moving away from 'current services' will help us ensure that government does not continue to increase spending on autopilot. As part the budget agreement, the state will change how it does business, and give residents and businesses the predictability they seek as government works to live within its means.
"This is a critical, structural reform that changes how we will do business in the future, and it's another step towards making the long-term reforms that we need to implement to be successful both now and down the road. As I have said before, we also must consider mandatory legislative approval of labor contracts as well as finally enacting the constitutional spending cap the voters approved decades ago - these are things that I would support if passed by the legislature. This budget, nonetheless, is a no doubt a critical start of the conversation heading in the right direction and reflects the beginning - not the end - of our work."
Background
Currently, the Office of Fiscal Analysis and the Office of Policy and Management calculate estimates for future expenditure growth based on current spending. Within the implementer bill is a proposal to change the way we budget by calculating growth only through fixed cost drivers, which would include debt service, Medicaid, pensions, and other entitlements. As a result, all other parts of the budget would assume a budgeting format in which only "fixed costs" would undergo the same "current services" calculation. This will result in more realistic estimates of spending in the future.
A summary of the language is as follows:
§ 42 - OFFICE OF FISCAL ANALYSIS (OFA) AND OFFICE OF POLICY AND MANAGEMENT (OPM) ANNUAL EXPENDITURE REPORTS
- Eliminates a requirement that OFA and OPM each submit, for the current biennium and the three following fiscal years, estimates of the spending and ending balance for each fund, with the assumptions used to make the estimates
- Requires them to instead each report, for the same time period, (1) the level of spending changes from current year spending allowed by consensus revenue estimates in each fund, (2) any changes to current year spending necessary because of "fixed cost drivers," and (3) the total change to current year spending required to accommodate fixed cost drivers without exceeding current revenue estimates
- "Fixed cost drivers" may include, but are not limited to, debt service, pension contributions, retiree health care, entitlement program, and federal mandates
EFFECTIVE DATE: July 1, 2016
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