Last week, the Appropriations and Finance Committees of the Connecticut General Assembly passed their versions of the fiscal year 2014-15 state budget. The bills hew closely to the budget proposed by Governor Malloy, with a few key differences. The Appropriations Committee bill (spending) is here, while the Finance Committee bill (revenue) is not yet online.

What Changes

Car tax: The governor had proposed creating an exemption from the automobile property tax (which is based on local property tax rates and funds municipalities) for the first $20,000 of a vehicle’s value. Cities and towns warned that this would reduce municipal revenue by $500 million, inevitably leading either to increased property taxes or steep cuts to services. The legislature’s budget keeps the car tax exemption, but delays it from taking effect until 2018.

Job-access funds: Malloy’s budget would have eliminated funding in the Department of Social Services for the “Transportation for Employment Independence” program, which funds transit aimed at improving access to employment for low-income workers, often in suburban areas. The legislature restored $3 million for the program in 2014 and $2 million in 2015.

Paratransit: The governor’s budget also cut $576,361 annually for dial-a-ride service that is not required by the Americans for Disabilities Act. The legislature restored this cut as well.

Still in the Budget: Fare Hikes, Drop in Special Transportation Fund

Bus riders are still facing a 20-cent fare increase in 2014 (from $1.30 to $1.50), as well as a 15 percent paratransit fare hike. These fare hikes will be used to “reduce subsidy,” not to increase or improve service. Also cut is the Transit Improvement Program, which was designed to pay for infrastructure improvements near train and bus stops.

While the governor’s budget would have reduced funding in the Special Transportation Fund (STF) by $75 million, the committee budget goes further, representing a net loss of $77.3 million from the STF in FY14 and $3.4 million the following fiscal year. The mechanics of the cut, however, are complicated.

• More revenue from Connecticut’s petroleum products receipts tax would be dedicated to the STF, as was intended when the tax was created. This increases STF revenue by $158 million in 2014 and $152.3 million in 2015.
• However, the State will drastically cut planned transfers from the general fund to the STF, more than offsetting the changes above.
• The State will also transfer $62.5 million from the STF into the general fund in 2014.

Legislators also kept the governor’s plan to bond $30 million each year in Town Road Aid instead of using pay-as-you-go funds. This will increase debt costs in the long run.