Malloy's Budget Contains 'More Spending Cuts Than Tax Increases'

In a briefing prior to the release of Gov. Dannel P. Malloy’s state budget proposal, Office of Policy and Management Secretary Benjamin Barnes detailed the plan to reporters Wednesday morning.

To read the full text of the speech, click here.

Faced with filling a projected $3.2 billion deficit in the coming year, Barnes repeatedly touched on the point that Malloy’s budget calls for a number of “shared sacrifices,” but protects local services.

Among the proposals included in Malloy’s recommended budget, which has a “bottom line” total of $17.94 billion for the 2011-12 fiscal year, and spending of $18.37 billion in fiscal year 2012-13, are numerous spending cuts and tax increases, the consolidation of about 30 percent of state agencies, and changes in the state’s revenue structure to eliminate dependence on borrowing or one time revenue to meet operating expenses.

“Balancing this budget will require shared sacrifices,” Barnes said. “Overall, the budget includes more spending cuts than tax increases.”

Malloy’s proposal includes $1.76 billion in reductions in spending, coupled with $1.51 billion in estimated increases in income, sales and other taxes in the first year of the budget.

The governor's budget also calls for the restoration of $270 million over the next two years to the Education Cost Sharing grant to cities and towns to make up for the anticipated loss of funds from the American Recovery and Reinvestment Act, whith is set to expire at the end of June. The federal funding is currently plugging about a 14 percent hole in ECS grants to local municipalities. Barnes said the ECS restoration would restore the state’s funding to the 2009 level.

Malloy’s proposal also relies on about $2 billion in savings and reductions over the next two years - $1 billion each year - from unionized state employees who are already under contract, Barnes said.

When asked how the budget would be balanced if those savings were not realized, Barnes replied: “The spending reductions that the governor has proposed, we intend to accomplish.”