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Rep. Stephen Harding: ‘Myth vs. Facts on Bipartisan Budget’

Report by Paula Antolini
September 21, 2017 4:o5PM EDT

 

Rep. Stephen Harding: ‘Myth vs. Facts on Bipartisan Budget’

Does the budget decimate UConn/UConn Health Center?

The Republican budget passed with bipartisan support by the legislature provides $1 billion in state aid to UConn and UConn Health Center over two years. This is a $200.1 million reduction to the anticipated $1.2 billion in state aid UConn would have received had the university not been touched by any budget cuts. While this is a cut of approximately 17%, this budget also for the first time allows for purchasing and contracting flexibility so the university can save money and enhance revenues in other ways that do not rely on taxpayer dollars.

There are policy changes that will allow in direct savings for UConn; like requiring professors to teach one additional class and eliminating the tuition waivers that allow UConn and UCHC employees and their dependents to attend UConn for free. Yes there are cuts to UConn, like every other agency. The difference between other state agencies and our flagship university to raise revenue or trim costs are substantial. UConn has alternative ways to support their organization through the school’s Foundation and fundraising or additional federal grants for research. While we have supported large investments over the years, we simply cannot afford it until our state is back on course. UConn still has an extremely healthy budget and now even greater flexibility to attain funding in ways that do not overly burden taxpayers. All of those avenues should be explored fully and pursued.
It’s also important to note that UConn is overstating it’s reductions by using the fiscal year 2017 original budget as the base, rather than what they actually received in 2017. It is only fair to compare the actual dollars taxpayers invested last year.

 

 

Does this budget change hospital taxes?

The budget proposed by Republicans and passed with a bipartisan vote in the legislature does not allow municipalities to tax local hospitals and preserves the small hospital pool. It also accepts the hospital settlement agreed to by the Connecticut Hospital Association and the governor’s office which includes tax changes our state hospitals lobbied for and meets all their requests to help them operate more efficiently and better meet the needs of their patients. This budget will also phase out the hospital tax over time and increases Medicaid rates which protect hospitals from changes on the federal level.

What does it do to the Earned Income Tax Credit (EITC)?

The Republican budget that garnered bipartisan support in the legislature would implement a graduated schedule for the Earned Income Tax Credit which provides 5% for single individuals, 10% for those with one child, 15% for those with two children, 25% for those with three or more children. By implementing a graduated scale we can make sure to preserve as much of the credit as possible for those who need the support most. Unfortunately facing a massive deficit of historic size we had to make the difficult decision to reduce this program in part to protect other core social services including SAGA. In addition, there are some who say a case could be made that it is not actually a tax cut, as over 80% of recipients never paid state income tax. Regardless on your opinions about the program–we prioritize children in the graduated scale model we worked hard to define.

Does this budget better serve the I/DD Community?

It is the only budget to fully fund day and employment services for individuals with Intellectual and Developmental Disabilities. It also does not carry forward reductions imposed by Governor Malloy to employment and day opportunities services for the intellectually disabled. In addition it adds funding to help individuals on the wait list access services.

Is this budget balanced?

Yes, OFA shows surpluses of $70 million surplus in 2018 and $40 million surplus in 2019.

How do we balance the budget?
– We rein in government as much as we can. We consolidate agencies and eliminate top heavy positions like Commissioners and their deputies.
– We make targeted spending cuts while simultaneously protecting core services.
– We implement 10% reductions to certain agency accounts.
– We implement overtime savings of 10 percent, a hiring freeze of non-24-hour employees, and cut the legislature’s budget.
– We include long-needed structural changes to achieve future savings such as a strong spending cap and bonding cap. The Democrat budget included a spending cap which recommends not counting our growing pension debt.

Why does OFA show a deficit in the out years?

All budgets proposed show deficit in the out years because the state’s financial problems cannot be resolved in one year. That being said, the Republican out year deficits are less than what was projected in the Democrats’ budget which includes many new tax policies like cell phones and non-prescription medicine (for example, in FY20 the Republican budget shows $1.2 billion deficit while the Democrat budget shows $1.4 billion deficit. In 2021, Republican budget shows $2 billion deficit while Democrat budget shows $2.1 billion deficit.) However, unlike the Democrat budget, the Republican budget also includes tax reductions to pension income, social security income, and inheritance/estate tax. We have heard our retirees and seniors loud and clear! They want to stay here and we want them here, too. These tax reductions contribute to the deficit on the surface because we are taking in less revenue, but they are likely to actually lower the deficit once implemented by sparking economic growth. In addition, the Republican budget contains a strict spending cap (as voted for nearly 25 years ago, but never enacted) and other long term structural changes to achieve future savings, restore confidence in our state, and therefore have a positive effect on the economy that cannot be calculated by OFA in the projections they show.

Does this budget change taxpayer funding for campaigns?

This budget eliminates taxpayer funding for political campaigns under the “Citizens Election Program” (CEP). The state cannot keep up with managing funds for this program that is a mere shadow of the original program meant to keep elections clean. In an extremely challenging budget year, this budget makes the decision to end taxpayer funding for political candidates – an expense which is expected to balloon to $50 million for the next election cycle with no additional money to be found in escheats which has previously funded the program. Democrats have actually underfunded this program in their own budget proposal by $10 million also putting the program in jeopardy because the state simply does not have the funds to support what this program has grown into.

Does this budget change teacher pension contributions?

This is not a tax on teachers. This budget does increase contributions teachers’ pay towards their own retirement from 6% to 8% at maximum, which remains below the national average of over 10% for teacher contributions. It was important in this budget to minimize the increase while also stabilizing this fund so the state can keep the promises it makes to our teachers who dedicate their lives to serving our state and its students. This is an increase that teachers pay into their own pensions; therefore it is all money that every single teacher gets back when they retire as it is part of their retirement savings. This is money that will be used to make the teachers’ pension plan more solvent and benefit teachers in the long run. In addition, this budget does not shift any teacher retirement costs onto towns and cities. Shifting any portion of this opens the door to more burdens being placed on municipalities and taxpayers. This is the state’s responsibility and we stood firm on not letting the state push off any amount of this obligation onto our cities and towns.

To make sure that the intentions behind the legislation adopted by the General Assembly are crystal clear, since partisan folks are distorting those intentions— the leadership of the Republican caucuses will put a request in writing immediately to the Teacher’s Retirement Board (TRB). While normally the TRB sets the state contribution amount every two years, this is too important to wait for the normal process. The money will be held in the General Fund UNTIL the TRB sets the amount as required.

Our intentions are crystal clear. This money will be deposited to the teacher’s pension fund, as was explained during the budget debate. Period.

Click here to see the Teacher’s Retirement Systems latest evaluation.

 

THREE CHOICES FOR TEACHERS

  • Support the bipartisan budget that gradually increases the pension contributions for teachers 2%, while also keeping the income tax exemption of 50% promised in the last session. This budget also promises level funding for every school district.
  • Support the Democrats proposed budget that passes a significant portion of the teacher’s pension payments to local taxpayers and municipalities. This mandate will force towns to consider laying off teachers or programs and their education funding cuts many communities. It also fails to keep the promise to exempt 50% of their income tax, dropping it down to 25% retroactively to January 1st 2017.
  • Support the Governor’s Executive Order which slashed education funding by almost $600 million and passes the burden of the teacher’s pension fund onto taxpayers.

 

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