Two newly elected Democratic governors pushed through ambitious legislative agendas in record time, with the support of legislatures controlled by Democrats. Both states took bold steps to jumpstart the economy in their states by passing bills to create jobs and to cut costs. Connecticut passed the biggest tax increase in the state’s history, while Vermont passed the nation’s first single-payer health insurance bill.
In Connecticut Gov. Dan Malloy and a Democratically controlled Legislature racked up a record of accomplishments as the 2011 legislative session came to a close on June 8.
Malloy’s biggest challenge was to close a $3.2 billion shortfall. In the end, a balanced budget of $40.11 billion for the next two years was achieved with spending cuts, the largest tax increase in Connecticut’s history of $1.5 billion and concessions of $1.6 billion over two years from labor, which still remain uncertain. Malloy has warned that failure on the part of labor to come up with concessions will result in up to 4,700 state workers being be laid off. Approximately 60% of the tax increases will come from the income tax. The sales tax will increase from the current 6% to 6.35%, with the end of some exemptions including the exemption on clothing.
The General Assembly’s accomplishments include passage of:
* A bill to reduce energy costs by creating a centralized power authority combining public utilities and environmental protection into a single agency. The new Department of Energy and Environmental Protection which will be headed by Daniel Esty, a former energy advisor to President Barack Obama.
* A measure purported to increase economic opportunities by creating the Connecticut Airport Authority, a quasi-public agency to oversee Bradley International Airport and five smaller airports in the state.
* A bailout package of $864 million to expand and renovate the ailing University of Connecticut Health Center, which includes UConn’s medical and dental schools and the John Dempsey Hospital. The plan, called Bioscience Connecticut is projected to create 3,000 new jobs.
* Funding for a research and technology park at the UConn Storrs campus that will create thousands of jobs. The $170 million package will include construction of a 125,000 square-foot, multilevel facility with research labs and incubator space for business.
* A bill mandating that private employers offer employees paid sick days. Connecticut is the first state in the nation to do so.
* A bill that grants in-state tuition for undocumented students who reside in Connecticut. The state now joins 10 other states that have passed similar measures.
* A bill to decriminalize possession of marijuana which will reduce fines and court costs for people in possession of less than a half ounce of marijuana.
Under Malloy’s budget proposal, the budget of the Connecticut State Universities would be cut by as much as 25% over two years. The first 10% would come from the state budget and the remaining cuts would come from merging the state universities with the Connecticut Community Colleges, Charter Oak State College and the Department of Higher Education which would be governed by a Board of Regents and one administrator. The Connecticut General Assembly’s Program Review Committee issued a report, which detailed skyrocketing tuition, and high administrative costs at the Connecticut State University. Lawmakers gave their blessing to the proposal which affects 100,000 students and more than 6,700 employees and is reported to save $4.3 million over two years, cutting 24 positions. UConn was not part of the plan. University and college officials are still waiting for the details of the merger.
A bill to provide $200,000 to develop a strategic plan for higher education that would include the UConn failed to pass.
Connecticut Community Colleges
Officials at the state’s community colleges are considering ending the longstanding “open door” admissions policy because of a projected $44.3 million budget deficit over the next two years. The Malloy administration and legislators cut community colleges by $13.2 million. In addition, pending cuts in staffing levels as a result of state employee concessions requested by the governor, stand to impact instructional levels. Also, officials are hoping not to raise tuition beyond the 2.3% increase approved earlier in the year. With rising enrollments, budget cuts and cuts in staffing levels, those that will be hurt the most are low-income and minority students who stand to be shut out of the only point of entry they have to higher education.
As part of his plan to reduce the state deficit, Malloy proposed cutting 25% of the Connecticut Independent College Scholarship Program at a time when cutbacks have been slated for federal student aid programs including Pell Grants. The program is currently funded at $23.4 million and serves more than 6,000 Connecticut students. After strong objections and outrage was expressed by parents, students and Connecticut college presidents, some of the funding was restored and three proprietary schools and Yale University will no longer be served by the program in the next two years. According to Judith Greiman, president of the Connecticut Conference of Independent Colleges, the budget now calls for an appropriation of just over $18 million in FY 12 and just over $16 million in FY13. Those funds will be allocated to nonprofit colleges and universities. The overall percentage cut to the program is 23% in the first year but only 14.8% to nonprofit institutions. The second year is a 31% cut overall but a 23.8% cut to the nonprofit institutions. In the interim, Greiman expects to work to recover funds for the program.
The good news is that Malloy kept his campaign promise not to cut local aid which includes the largest portion going to education aid. He provided $540 million over two years in new state funding to Education Cost Sharing Grants.
The bad news is that education reform measures failed to gain passage. While the state applies for the third round of federal Race to the Top funds, state legislators sent a bill to the governor’s desk that effectively delays school-reform measures. Additionally, Malloy has gone six months without appointing a new commissioner of education.
The General Assembly killed a measure that would have changed the age to enter kindergarten to 5 years by October 1. The legislation would also have required that all students be enrolled in kindergarten by age 6. Currently, Connecticut parents can defer a child’s enrollment until age 7. Some lawmakers responded that the issue was whether there would be funds to provide alternative preschool programs for students who didn’t make the cutoff.
Other casualties of the session included a bill proposed by Rep. Andrew Fleischmann, who co-chairs the Joint Committee on Education, to require teacher performance evaluations in school districts every two years. Now, any action to review and revise the practice of laying off teachers who were the last to be hired and consequently the first to be fired will be postponed indefinitely. Also, a number of bills to address school finance failed to make any headway in the session.
Vermont Legislative Session
Newly elected Vermont Gov. Peter Shumlin and a Democratically controlled legislature closed a $176 million gap in the budget without raising broad-based taxes and completed a 17-week legislative session ahead of schedule, adjourning on May 6. Shumlin worked with legislators to set an economic agenda for the future by passage of the following:
* A bill to reduce healthcare costs while providing health insurance for every Vermont citizen. The legislation establishes a framework to create a single-payer health care system under the direction of a five-member council. The council will define benefits, cost-containment measures and set up insurance exchanges as required by federal law. A plan to fund the measure is to be submitted to the governor by 2013.
* A telecommunications bill to expand broadband coverage and cell-phone service throughout the state by investing in expanding fiber-optic lines and wireless networks.
* A jobs bill that will allow emerging industries and businesses to have access to capital and credit. The bill is designed to stimulate manufacturing jobs, improve internships and expand job-training programs for young people. Additionally, the bill focuses on Vermont’s agriculture sector and provides for marketing and promotional efforts to be directed toward the Buy Local program and diversification in Vermont’s farming community..
The University of Vermont and the Vermont State Colleges managed to survive further cuts and were level funded in Shumlin’s budget. For FY12, UVM received $36.7 million and the state colleges received 23.1 million.
The budget provided $1.5 million in additional scholarships to the UVM, the state colleges and the Vermont Student Assistance Corporation.
The Vermont General Assembly passed and the governor signed a law that would erase a state-imposed limit that allows only 50% of 3- and 4-year-olds in Vermont school districts to enroll in pre-K. Proponents say lifting the cap will lead to reduced costs for special-education programs.
Carolyn Morwick is a consultant at NEBHE and former director of the Caucus of New England State Legislatures.