Four months after Democratic legislators left key accounts in the new state budget underfunded by hundreds of millions of dollars, Republicans are still waiting for an opinion on whether the process was legal.
And nearly one month after biggest fiscal mess — a $3.3 billion Medicaid account — got significantly worse, one GOP leader publicly questioned this week whether the Democratic Attorney General William Tong is dragging his heels for partisan reasons.
“We certainly have provided the attorney general information throughout the entire month of May that, I think, substantiates the point that there were some statutory violations done when this fake budget was passed,” House Minority Leader Vincent J. Candelora of North Branford said, referring to a letter he and Senate Minority Leader Stephen Harding of Brookfield wrote to Tong on May 7, one day before the legislature adjourned, and follow-up correspondence on May 20 and 29.
“I’m not surprised it’s taking them [Tong and his staff] time to maneuver around the information that was provided to them, because it’s not a good look for the Democrats,” Candelora added.
Tong countered that “politics plays no role in my legal analysis or the issuance of legal opinions. To suggest I would play games with a legal opinion is wrong and unproductive. I have great respect for Leader Candelora and the Republican caucuses and the process for seeking a legal opinion.”
At issue is Democratic legislators’ decision to close the last session without formally adjusting the preliminary $26 billion budget they and Gov. Ned Lamont had approved 11 months prior for the fiscal year that would begin on July 1, 2024. Traditionally, legislators have revised these early-draft budgets shortly before they take effect, because spending needs normally change over time. But they are not legally required to do so.
Still, Lamont had warned his fellow Democrats last spring that this preliminary budget needed work. According to his budget office, it short-changed required contributions to pension and other retirement benefit programs by more than $150 million.
And the Department of Social Services’ Medicaid account, which covers the bulk of state spending in this federal program, was reporting $165 million in cost overruns last April with just two months left in the 2023-24 fiscal year. The preliminary budget for 2024-25 had planned for less than 60% of that growth.
Connecticut had more than enough funds to cover those costs, but it would have involved revising a spending cap and other controversial fiscal controls that, since 2017, have forced state government to save more than $12 billion to place in reserve or to pay down pension debt.
Democratic legislative leaders said many of their members are ready to scale back this aggressive savings program somewhat, but Lamont and Republicans have opposed any adjustments.
To compromise, Democrats left the original budget for 2024-25 in place, complete with holes in the Medicaid and retirement benefit accounts. But before they adjourned in early May, they transferred a portion of the $1.6 billion surplus from 2023-24 to the next year to mitigate a portion of those gaps.
They also had about $370 million in temporary federal pandemic grants they could have used to balance the books. But instead, they took advantage of a technicality that allows them to spend those funds outside of budget constraints and dedicated those dollars to higher education, social services, child care and children’s mental health.
Republicans cried foul on several grounds:
- The state Constitution has a balanced budget requirement, and some argued that intentionally short-changing accounts effectively was a violation.
- The fiscal controls mandating savings were also effectively subverted. The new $26 billion state budget was required to have a nearly $300 million built-in operating surplus, while also saving about $1.2 billion in volatile income and business tax receipts, which then would be used to pay down pension debt.
But just seven weeks into the new fiscal year, the administration used its first monthly budget assessment to report that nearly $300 million operating surplus already was down to $113 million and that the Department of Social Services would overspend its Medicaid account by $210 million this fiscal year.
Democratic leaders have countered that the preliminary budget was balanced when it was adopted. They also note the state has more than enough funds through the operating surplus to cover any gaps and that the volatile revenues earmarked for pension debt also can be used to cover budget shortfalls if necessary.
Advocates argued that public colleges and universities, social services and other core programs are in crisis, and Democratic leaders said their caucuses sought only to preserve them from deep cuts that would harm students, people with disabilities and others in need.
Both House Speaker Matt Ritter, D-Hartford, and Senate President Pro Tem Martin M. Looney, D-New Haven, predicted legislators will need to adjust fiscal controls in the next budget cycle to avoid future legal battles such as the current one.
A spokeswoman for Tong, Elizabeth Benton, said the AG’s office has been in regular communication with GOP leaders to fully understand their concerns, and it is not unusual for such a process to take time.
“We appreciate the request and will be issuing the opinion shortly,” she said.
This story was originally published by the Connecticut Mirror on Sept. 13, 2024.