Connecticut governor asks for cuts in services, education boost

Wed Feb 6, 2013 4:29pm EST

Feb 6 (Reuters) - Connecticut would increase education funding without new taxes by slashing $1.8 billion of spending on services over the next two years, under a budget proposed by Connecticut's Democratic Governor Dannel Malloy on Wednesday.

Malloy's plan would boost funding for basic education by $152 million over two years and would invest more than $1.7 billion into the University of Connecticut to expand science, technology, engineering and math studies and hire 259 new faculty members.

Many of the cuts are to social service programs, including hospitals, according to budget documents. The state, like many others, is facing rising fixed costs for healthcare and pensions.

The biennial budget plan would spend $21.5 billion in fiscal 2014 and $22.3 billion in fiscal 2015. Connecticut's Democrat-led legislature must agree on a budget before the start of the fiscal year on July 1.

Malloy's plan would also cut some tax levies, eliminating property taxes on private and commercial vehicles worth less than $28,500 and reinstating a tax exemption for clothing up to $25.

No city, town or other municipality would see their state aid drop, and many will receive more than the current fiscal year, he said.

Malloy also proposed about $5.4 billion of new borrowing over the two-year plan: $3.1 billion of general obligation bonds, nearly $1.3 billion of transportation bonds, and $997.4 million of bonds for wastewater treatment systems.

The plan calls for a restructuring of state government with major consolidations among state agencies.

Revenue growth for the current fiscal year is estimated at 3.9 percent. Growth for 2014 is expected to slow slightly to 3.7 percent and then rebound to 4.7 percent in fiscal 2015, according to budget documents.

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