Gov. Malloy's 2-year budget to cut $1.8 billion

Published on NewsOK Modified: February 5, 2013 at 8:28 pm •  Published: February 5, 2013
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HARTFORD, Conn. (AP) — Deep cuts to hospitals and changes in Medicaid eligibility are among the reductions Gov. Dannel P. Malloy is proposing in his new two-year budget, set to be presented on Wednesday.

A budget document obtained Tuesday by The Associated Press shows the Democratic governor's plan cuts $1.8 billion in spending from the current services budget, which is the amount of spending required by law.

Malloy, who is scheduled to address a joint session of the General Assembly at noon, has been criticized by legislative Republicans for spending initiatives he has recently unveiled, especially those relying on borrowing. He's also likely to receive criticism for increasing spending in the general fund, the state's main account, by roughly 5 percent in the first year and 3.7 percent in the second.

Under Malloy's proposal, the general fund would be about $20 billion in the first year and $20.8 billion in the second, according to the budget document.

Malloy's budget director, Benjamin Barnes, said much of the spending increase stems from state employee retirement health care and pension costs, expanding Medicaid eligibility under the federal health care reform law and other higher Medicaid costs. To help offset costs, besides the spending cuts, Malloy's budget extends various taxes and tax credits set to expire.

Chief of Staff Mark Ojakian defended the package, which he called a framework for discussions with lawmakers over the coming weeks.

"We're producing a balanced budget while increasing spending by a very marginal amount to reflect the governor's priorities but also cutting programs and no new taxes," Ojakian said.

The General Assembly, which is controlled by Democrats, has until June 5 to reach an agreement with the governor.

The largest reduction is made in the Department of Social Services account, the largest in the budget. Barnes said many of the spending reductions included in a recent deficit-cutting plan, including reductions in the funding hospitals use to help cover the cost of caring for uninsured patients, are extended into the new budget proposal. He said the payments to hospitals are cut in half in the first year and are phased out in fiscal year 2015.

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