The pace of the 2013 Connecticut General Assembly accelerated rapidly as soon as they hit the ground running on opening day. Once legislation regarding gun control, school safety and compensation for first responders, all in response to Newtown, had passed, Legislators and the Governor were then confronted with a dramatically worsening budget picture. Although revenues were up for 2012, projections were for decreasing revenues of approximately $250 million for each of the next two years.
Ultimately the Governor and the majority Democrats passed a budget without any Republican support and which increased spending by nearly 10% over the two year period. At the heart of the budget process was a difficult debate over compliance with the state’s spending cap. Without reductions in either the Governor’s or the majority Democrats’ spending plans, the spending cap would have to be altered to permit the increase.
Normally changes to the spending cap need a 60% approval vote in both the House and the Senate. However, three Democrat Senators refused to support the unsustainable growth in spending thus necessitating passage of “an accounting change” which moved $4.7 Billion of Medicaid spending off budget; a vote that only required a simple majority. Without this change the budget could not have passed.
The final budget, without counting all of the Medicaid spending, is $18.6 Billion and $19 Billion in fiscal 2014 and 2015 respectively. The spending increase is 3.7% and 2.2% annually. Crucial to “balancing” this budget it the assumption of an estimated 6% revenue growth over the two year period. LDAC members must continue to speak to their legislators about fiscal responsibility. Even though a budget and the bills necessary to implement it were adopted on time for the first time in more than a decade, Connecticut’s fiscal crisis is not over.
The Governor and the majority Democrats contend that taxes were not increased to balance the budget. Nevertheless, the gasoline tax will increase between $0.03 to $0.04 per gallon on July 1, 2013; the 20% corporation business tax surcharge which was to sunset will be continued, and a tax on electric generators which also was to sunset, will be continued for three months. Significant borrowing also occurred. Nearly $1.5 billion in new borrowing was authorized and interest payments on some existing loans were deferred for two years.
The rest of the 2013 legislative scorecard is dominated by what did not pass. The new Speaker of the House, Brendan Sharkey (D-Hamden) convened the Municipal Opportunities and Regional Efficiencies (MORE) Commission. This was an attempt to find ways to deliver municipal services more effectively and efficiently. Although few major changes came from the study, the Commission will reconvene again by October to continue its work. Some of the topics considered were: taxation of motor vehicles, alternate methods of taxing commercial property, land value taxation, prevailing wage, and binding arbitration.
LDAC Bills of concerns that passed:
– SB 387 increased the minimum wage by $0.40 on 1/1/14 and $0.35 on 1/1/15. The wage was not indexed.
– SB 910, file 871, concerns access to personnel files – employers now must grant access within 7-10 days. PA 13-176.
– HB 6658, file 693 regarding non-compete agreements. Individuals must be allowed up to 7 days to consider signing such agreements.
LDAC Bills of concerns that did not pass:
– HB 5682 regarding mechanics’ liens and 5098 regarding notice of liens.
– HB 1075, file 841 would have required LDAC members to be responsible for significant additional reporting involving the sale of materials to contractors. LDAC worked in conjunction with the Home Builders’ Association to stop the bill in the Senate.
– HB 5264, file 159 would have required cash or credit refunds for the return of damaged or defective goods when made within 2 days.
– SB 907 would have made it more difficult for employers to dispute workers compensation claims and treatment costs.
– SB 926 would have imposed further penalties regarding unemployment compensation violations.
– SB 1074 would have required hospitals to charge actual costs rather than billed costs to employers for workers compensation treatment. The bill would have reduced employers’ workers’ compensation costs.
– SB 54 would have required employers to make payroll deductions for certain private sector employees who elected to take part in a state run retirement plan. LDAC actively participated in a broad based business coalition which killed the bill.
Various bills would have allowed stress related workers’ compensation benefits. None passed. A special fund, outside of the workers’ compensation system, was created to assist the Newtown first responders; however, the issue will be likely return next year.
All in all it was a particularly busy Legislative Session. Despite general success on LDAC specific issues, members should be
extremely concerned about the fiscal direction of the state budget. The issue has not gone away and much work is still required.
The following report is from the Lumber Dealers Association of Connecticut (LDAC) lobbyist, Marshall R. Collins of Marshall R. Collins & Associates, and NRLA Government Affairs Manager, Jeff Keller.