Connecticut House approves state budget plan

HARTFORD, Conn. (AP) -- A state budget that calls for big spending increases for science and technology at the University of Connecticut and expands gambling to bring in more revenue cleared the House of Representatives on Sunday and now heads to the Senate just days before the 2013 legislative session ends.

The deal between Democratic Gov. Dannel P. Malloy and majority Democrats shifts about $6 billion in mostly health care spending for the poor from under the state's constitutional spending cap. It does not include large-scale tax increases such as those in the budget that passed two years ago, but minority Republicans still found fault.

"We're still inching forward. We're putting it together with duct tape, and Band-Aids, a little spit and glue," said House Minority Leader Lawrence Cafero Jr., R-Norwalk. "So much so, to fill holes we're relying on things like keno — things we haven't even studied or heard about," he said, referring to the bill's authorization of the Connecticut Lottery Corp. to institute the game of chance keno, which is based on the drawing of numbers.

House Majority Leader Joseph Aresimowicz, D-Berlin, noted how the two-year, approximately $44 billion budget represents the key funding priorities of the legislature such as major technology and science investment at UConn, the continuation of public school reform and the protection of state aid to cities and towns. The budget attempts to cover a projected $2.5 billion deficit.

"We're doing what you promised your constituents when you wanted to come up here and you wanted them to vote you up here," Aresimowicz told the House members. "You're making a difference."

The bill passed along party lines, 95-48, following a five-hour overnight debate that ended shortly after 5 a.m. The legislature's minority Republicans, who did not participate in the budget negotiations, all voted no. The Senate is scheduled to hold a vote Monday, two days before the legislative session ends.

Like their House counterparts, Senate Republicans will likely criticize the plan for shifting about $6 billion in mostly Medicaid funds from under the cap that's been in place since 1991, when Connecticut enacted a personal income tax. After the $6 billion is moved off-budget, the two-year plan is $37.6 billion.

But Democrats argued that Connecticut is one of the only states with a spending cap that counts federal Medicaid reimbursements toward the mandatory spending limits. They said the 100 percent Medicaid reimbursement Connecticut is set to receive under the federal Affordable Care Act after expanding eligibility should not crowd out spending on other key programs, such as education.

"We are the only state in the country that does not budget 100 percent federally reimbursed funds in this manner," said Rep. Patricia Widlitz, D-Guilford, co-chairwoman of the legislature's revenue committee. "We are allowing the people of the state of Connecticut to access as many federal funds as we possibly can."

Both Democrats and Republicans raised concerns about the expansion of gambling in the budget bill.

Lawmakers said the proposal adds 600 lottery terminals and allows keno. Both the Mashantucket Pequot and Mohegan Tribes, which contend they have exclusive rights to such games at their casinos under a compact with the state, would receive up to 12.5 percent of the gross keno revenues.

"I'm very disappointed this in here," said Sen. Andrea Stillman, D-Waterford, referring to keno. "I understand the problems we're facing. I'm disappointed that we're using another opportunity for gambling in this state."

The package does not include a proposal by Malloy to auction off electricity services for about 800,000 customers who haven't yet chosen a power company.

In an interview with The Associated Press on Saturday, the governor's chief of staff, Mark Ojakian, said the administration decided "in order to get many other things through in the budget, we had to compromise" and forgo the auction plan, which was opposed by the Connecticut AARP, other groups and many lawmakers.

Malloy had proposed the new arrangement to spur companies to sell cheaper electricity by steering the customers into less expensive energy plans. Participating companies would bid for the right to sell power to these customers on standard-offer plans, providing the state $80 million in revenue.

Highlights of the budget bill include a tax amnesty program, extension of a 20 percent surcharge on the corporation tax for two years, a two-year moratorium on film production tax credits and a three-month extension of a temporary tax on electric generation facilities. Also, starting June 1, 2015, the bill exempts clothing and footwear costing less than $50 from the state's 6.35 percent sales tax.