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Home Economy

Deficit cutting on agenda, but to what degree?

Alexander Soule by Alexander Soule
June 30, 2009
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The Connecticut General Assembly convened Jan. 7 with a Democrat majority capable of overriding any veto by Republican Gov. M. Jodi Rell.

 

Unlike the two-year legislative session that commenced two years ago, however, in the early days of the current session the legislature appeared content to wait out Rell”™s proposals for dealing with intractable problems ”“ most prominently, looming shortfalls in revenue for previous budgets that established an unsupportable level of state spending.

 

In January 2007, assembly leaders had a packet of strategic proposals ready almost from the get-go, perhaps most prominently the creation of the Connecticut HealthFirst Authority to find ways to expand health care access in the state while reducing costs (see related story on page 1).

Sen. Donald Williams Jr., a Brooklyn Democrat beginning his third term as senate president, introduced the first bill of the senate session: an act concerning economic “security” for Connecticut families, in his words, that did not immediately lay out its parameters.

 

In the early days of the session, the legislature and governor appeared to be in lockstep on the goal of deficit reduction, but until Rell releases her budget proposal next month it is uncertain the degree to which the two parties will diverge.

 

Through mid-January, Rell had stuck to a strategy of closing budget gaps by exploiting previously untapped revenue sources ”“ some of them requiring the assent of federal agencies. 

 

That was before the Connecticut Office of Policy and Management released the latest deficit estimates, however, showing income tax collections were off 15 percent in December and corporate tax receipts were down 30 percent. OPM promptly doubled its deficit prediction for the current fiscal year to $700 million.  The Connecticut General Assembly and the Rell administration already must tackle an estimated $6 billion deficit for the 2010 and 2011 fiscal years for which they will craft a budget this winter and spring.

 


With the latest budget figures, Rell appears resigned to abandoning her previously stated goal of no widespread layoffs by state agencies.

 

“They will hurt,” Rell said of her proposed cuts, in her state of the state address to the Connecticut General Assembly on Jan. 7. “They hurt me to even offer them.”

 

Despite the clout Connecticut voters gave his party in November, Williams and other Democrats sounded a similar ideology. The Connecticut House of Representatives enters the session with a new speaker of the house in Chris Donovan of Meriden, who replaces James Amann of Milford who did not run for re-election as he contemplates a gubernatorial run in 2010.

 

“When our work is finished, there will not be a single state department, program, or area of spending that has not been changed or touched in some significant way,” Williams said in comments at the opening of the session. “But if we make the tough decisions required in the short term, and invest in ways that provide jobs for the long term, we will be well positioned to move forward in a year or two when this economic downturn ends.”

 

In the meantime, more than 100 bills were filed in the first week of the session, including three by Woodbridge Sen. Joe Crisco to alleviate the ongoing shortage of nurses in Connecticut by increasing state scholarship aid and a loan forgiveness program for nursing school graduates.

Crisco also offered a remedy for ailing automobile dealers, proposing that any municipality containing an enterprise zone to extend the zone”™s tax benefits to car dealers.

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