Gov. Dannel P. Malloy Tuesday signed the legislature’s budget, but not without airing concerns that it could be out of balance.
He also used his line-item veto to block supplemental payments to hospitals as part of a hospital tax change, expressing concerns that language in the budget could actually result in a deficit for the state.
Despite his concerns, Malloy, a Democrat who isn’t seeking reelection, felt the budget included several positive elements and, perhaps more importantly, ended the longest budget stalemate in state history. Malloy’s signature came on the 123rd day of the fiscal year.
“The reality is a lot of wins on the things that I thought … were important to the state, and I had to balance what was accomplished versus what wasn’t accomplished, and the necessity for Connecticut to have a budget,” he said.
The legislature overwhelmingly approved the $41.2 billion bipartisan budget last week with votes of 33-3 in the Senate and 126-23 in the House. Those margins, which clear the two-thirds majority needed to override a veto, indicated the legislature could have enacted the budget even without Malloy’s blessing, but the governor said that didn’t factor into his decision.
Malloy’s announcement drew praise from legislative leaders.
“The governor made the right decision to sign the budget into law, thus assuring that critical funding, particularly for our schools as well as important services and programs will now be in place,” House Speaker Joe Aresimowicz, D-Berlin, said in a statement.
Malloy praised several policy changes within the budget, including the creation of a municipal accountability board to monitor towns that receive additional aid, restoration of higher education compared to the GOP-crafted budget he vetoed in September, structural changes, and aid for homeowners with crumbling foundations.
He raised concerns, though, that some of the assumptions in the budget are unrealistic, a problem that could knock the budget back out of balance, even after lawmakers appear to have successfully closed a projected $3.5 billion shortfall with the deal.
Malloy questioned some of the revenue projections and said some of the saving assumptions may be too high to obtain. Senate Republican Leader Len Fasano, R-North Haven, said he also had concerns about potential mid-budget deficits.
Malloy’s line-item veto specifically addresses funding to the hospitals — line-item vetoes are limited to appropriations — but those payments are key in getting the hospitals to embrace the tax increase to 8 percent.
The state would repay the hospitals for those tax levies in order to get larger reimbursements from the federal government, and then share those proceeds with the hospitals. Malloy raised concerns that federal authorities wouldn’t approve of the increase as written, but the language would still bind the state to make the payments and put Connecticut on course for a $1 billion deficit.
Lawmakers could vote to override the line-item veto, but Malloy expressed hope that they will instead renegotiate the language. Fasano said lawmakers will work on language “that makes sense for all parties.”