Malloy says New York budget proposal is not the way to go

April 13, 2011 12:00 am • Last Updated: April 13, 2011 5:31 am

By BY JC REINDL Day Staff Writer

Hartford - Gov. Dannel P. Malloy has been hounded during the past two weeks by variations of the same uncomfortable question: Why can't your budget be more like the New York governor's?

The question comes up often during Malloy's statewide round of town hall meetings, where he markets his proposal to bridge the state's two-year, $3.3 billion budget deficit with tax increases of $1.5 billion in the first year and attendant spending cuts of nearly $760 million.

Some who have attended these meetings have made clear their views that the superior budgeting strategy is that of New York's fellow rookie governor, Andrew M. Cuomo, who late last month struck an agreement with his legislature that would eliminate a $10 billion deficit without raising taxes, and even do away with a so-called "millionaire's tax."

But Cuomo's budget works by slashing local aid by a reported $4.65 billion - a strategy critics fear will devastate school districts.

The Malloy administration Tuesday released a contingency plan that they said would make cuts in state funding to Connecticut's cities and towns that are proportional in scale to the local cuts in Cuomo's budget.

The Connecticut cuts would total about $1 billion - the same amount that Malloy is seeking in labor savings from state workers in each year of his budget.

"If we did what they did in New York … this is what it would look like," said Gian-Carl Casa, an undersecretary at the state Office of Policy and Management.

"It's not something he would formally propose, but it is an option," said Colleen Flanagan, the governor's spokesman.

Malloy has defended his preferred budget plan involving state-level tax increases and labor concessions by warning that cuts to municipalities would only force local governments to raise property taxes.

The Malloy administration remains in closed-door talks with unions representing more than 40,000 state workers. Neither side is speaking publicly on how the talks are going. The contingency model released Tuesday, dubbed the "Cuomo plan" by some in the Capitol, is already spooking mayors and municipal leaders.

"That's quite a number,'' said New London Mayor Martin T. Olsen, when he heard the city could lose more than $11 million in state aid. Under the current grant formulas, the city would receive just over $32 million in state grants to offset its proposed $83 million 2011-12 municipal budget. Malloy's contingency plan would reduce that grant to $20.7 million.

"Obviously as we enter our budget deliberations tomorrow, Wednesday, we certainly need to be cognizant with our relationship to the state," Olsen said. "We will be looking at our budget with a fine-tooth comb."

Groton Town Manager Mark Oefinger said that most of the $32.6 million the town receives from the state is for education.

"This sends home a message," Oefinger said. "It's doubly catastrophic because it's well into the budget process. We're struggling to find $3 [million] or $4 million in cuts."

Jim Finley, executive director and CEO of the Connecticut Conference of Municipalities, said in a statement that the plan "would result in devastating municipal service cuts and massive layoffs of municipal employees and teachers" and "underscores what is at stake in negotiations with the state employee unions."

East Lyme's state aid would drop from $8.5 million to $5.5 million under the contingency model.

"I'm not sure towns across the state could weather that type of cut," First Selectman Paul Formica said. Formica said the town would need to reopen its budget and look at everything.

"I would hope the governor and the legislature finish their process before we finish ours," he said.

Malloy has said he hopes to reach a budget deal with the General Assembly by May 6. The governor was scheduled Tuesday night to conclude his series of 17 town hall meetings on his proposed budget at Middletown High School.

j.reindl@theday.com

Day staff writers Kathleen Edgecomb, Chuck Potter and Stephen Chupaska contributed to this report.

The governor's contingency model calls for significant funding cuts to municipalities in southeastern Connecticut:

Clinton - $2.45 million

Colchester - $5.08 million

East Lyme - $3.07 million

Griswold - $4.04 million

Groton (town) - $10.26 million

Ledyard - $4.86 million

Lisbon - $1.48 million

Lyme - $102,022

Montville - $5.64 million