Connecticut Lawmakers Wrangle Budget As $900M Deficit Looms
HARTFORD, Conn. (CBSNewYork/AP) -- While Connecticut lawmakers have come to terms on a state budget for this year, major changes lie ahead if the state is to avoid a major deficit next year.
The budget passed with no cuts in state aid to towns and cities, with lawmakers agreeing on a plan to slash the current $220 million deficit.
The package replaces mid-year cuts made earlier by Governor Dannel P. Malloy. For example, it releases a total of $140 million that was being withheld from Connecticut hospitals.
It also reduces funding to social services, but by less than Malloy's plan.
The General Assembly cut $350 million in December to balance the deficit-plagued budget. The state's income tax revenues in particular have been suffering.
However, Connecticut is expected to face a $900 million deficit in the new fiscal year, which begins on July 1, WCBS 880's Fran Schneidau reported.
According to State Senate minority leader Len Fasano, the only way to help tackle the potential budget issues is to make comprehensive changes on budgetary structure.
"Contract costs, we've got to get the unions to the table, we've got to get our bonding under control -- the governor's bonded through almost $3 billion last year," Fasano said.
Fasano says the changes in the way the budget is shaped will help control the exodus of large companies and high-wealth resident taxpayers who look to leave after tax increases.
Two billionaires have recently left Connecticut for warmer — and cheaper — locales. Entrepreneur Thomas Peterffy and food industry executive C. Dean Metropoulos both left the state for Palm Beach, leaving the state with 13 billionaires.
General Electric recently announced they would be moving their corporate headquarters from Connecticut to Boston, after citing the state's proposed tax legislation as a concern for the company.
Health insurance giant Aetna voiced similar concerns after the initial budget was passed.
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