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STATE OF THE STATES

This year has seen a significant surge in the number of late state budgets that underscores a new and growing divide in the states. Eleven states started their current fiscal years without a signed budget, and another ten missed their initial deadline and had to call a special session to approve a spending plan. Although most states have been able to overcome their budget impasses, the three states discussed below have carried their debates into the fall, and Connecticut and Minnesota are still at loggerheads. While state budget delays may not be an immediate fiscal concern, they are examples of increased polarization on basic issues at the state level throughout the country. This is indicative of a larger political trend that impacts all issues before legislatures across the country, one that makes compromise increasingly harder to reach.

CONNECTICUT

In the latest turn in Connecticut’s budget standoff, Gov. Dannel Malloy on Sept. 28 vetoed the biennial budget plan that had been introduced by Republicans and adopted by a slim majority of the Connecticut General Assembly. Malloy said he is willing to compromise on a bipartisan plan, but he complained that the Republican budget “significantly reduces – and in some cases completely eliminates – funding streams for the state’s highest need and lowest performing school districts.” Malloy also said the budget ignores “a court order to create a more equitable education aid funding system” and does not help close the achievement gap. GOP leaders defended cuts to education and stated that the cuts to the University of Connecticut were exaggerated.

An override requires a two-thirds vote: 101 votes in the House and 24 in the Senate. Hence, Republicans would have to coax 29 Democrats in the House and 6 in the Senate to cross the aisle and override the Democratic governor’s veto. Only 5 Democrats in the House and 3 in the Senate voted for the GOP budget, making the prospect of an override a long shot at best.

Pressure on Malloy and legislators is expected to intensify in October when or if the state fails to distribute education aid. Without a budget, Malloy says, there is no valid formula for distributing aid other than the minimum required to meet the constitutional responsibility of providing a free and public education. Connecticut’s southwest corner, home to affluent suburbs within commuting distance of New York City, have long served as economic engine for the state, but the state’s demographics have since changed, and legislators are facing increasingly tough decisions absent new areas of growth to help shield the state from fiscal turmoil.

MINNESOTA

In Minnesota, Democratic Governor Mark Dayton and the Republican-led Minnesota legislature are entering court-ordered mediation to work out their major differences. At stake is whether and how the Minnesota House and Senate will be funded after Dayton used a line-item veto to nix $130M in funding for the legislature earlier this year. The talks, which began on Sept. 20, include the governor as well legislative leaders from both parties.

Although Gov. Dayton said he won’t let the public into details of the talks – at mediator Rick Solum’s request – court documents and other sources reveal a lot about how the state got into this situation. Nearly four months after the dispute began, both sides remain divided on a number of issues. Amid a dispute over a tax-cut bill and a number of policy issues, Gov. Dayton struck funding for the state legislature from the budget to try to force GOP leaders to negotiate. The legislature instead sued, arguing that the governor violated the state constitution by restricting the power of another branch of government. Despite the governor’s veto, the legislature has continued to receive money from the state to pay for nearly all its expenses.

In June, Ramsey County District Judge John Guthmann ordered the state to continue providing money to the Legislature so that it could continue to “draft, debate, publish, vote on and enact legislation.” That same judge in July overturned the governor’s veto as unconstitutional.

Two months later, however, the Minnesota Supreme Court upheld the governor’s veto, but left in place the district court’s earlier funding order. Later that court ordered both parties to disclose all funds available to the legislature, after it was discovered to be tapping into $3.6M in special legislative savings accounts, or “carryover funds,” outside the governor’s control. A court-sanctioned agreement to cover the legislature’s expenses expired on Oct. 1; although the state continues to pay these bills, it is still not clear whether they will be charged to the state’s general fund or against the legislature’s carryover funds. Unlike Connecticut, Minnesota has a growing and increasingly diverse economy, but with sharp ideological between parties on how to manage and fund such growth.

RHODE ISLAND

In Rhode Island, where Democrats have single party control, legislators returned in mid-September to pick up where they left off in June, when scores of bills were left hanging as a result of disagreement between House and Senate leaders over a proposed tax cut.

This budget had originally passed the House, but faced resistance in the Senate, which questioned whether the state could afford House Speaker Nicholas Mattiello’s $221M plan to phase out a municipal car tax over a six-year period. After a month-long standoff, a compromise was reached and the $9.2B plan passed finally passed the Senate along party lines, with only the five Republican senators opposed. The measure includes a $26M cut in the car tax, a new free-tuition program for the Community College of Rhode Island, and an increase in the minimum wage.

Both chambers returned on Sept. 19 to take up nearly 200 other bills that were within inches of passage in June. Among those that passed: guaranteed paid sick days, a ban on gun purchases for individuals convicted of domestic violence crimes, and a provision (since vetoed) guaranteeing pensions for firefighters who develop heart disease while in the line of duty. Rhode Island’s dispute, while an intraparty one, is further evidence of divisiveness in state politics, where finding middle ground is becoming increasingly more difficult.