The Connecticut General Assembly and Gov. M. Jodi agreed to create a revolving loan fund and a hiring tax credit to benefit small businesses, and a tax credit for “angel” investors in startups, among several measures approved in the final scramble of the legislative session that produced a budget on schedule, a claim lawmakers could not make last year.
Rell and Democrats trumpeted that fact as well as what they said was a budget with no tax increases ”“ though an energy bill is expected to increase rates paid by electricity customers if it becomes law, with or without Rell”™s signature.
“This budget is not perfect ”“ I would have preferred to see more cutting in state spending and greater reductions in the overall size and scope of state government,” Rell said, in a prepared statement. “Yet this agreement closes major deficits and does so without raising taxes or transferring the burden to property taxpayers. Along with reducing our borrowing, these were my bedrock goals as we developed this plan.”
“It took us a long time. It was a fight, but we got there,” said Chris Donovan, a Democrat from Meriden who is speaker of the Connecticut House of Representatives. “At times, everybody joined us and at times others didn”™t, but the result was in the end we had a bipartisan agreement with the governor ”¦ We balanced our budget.”
Not without borrowing of course, and against a backdrop of massive future obligations for pension and health care benefits of retiring state workers ”“ for which the state currently has no plan of solvent perpetuity. Senate Republicans broke with Rell to vote against the budget bill, arguing any borrowing is irresponsible given those future obligations.
“We failed yet again to implement any serious spending reductions or reinvention of government, and instead relied upon one-time gimmicks to close our $700 million deficit for next year,” said Sen. Dan Debicella of Shelton, in a prepared statement. “These gimmicks come on top of $1 billion in new taxes and $1 billion in new borrowing from the previous year. Connecticut still faces an $8 billion deficit over the next two years ”“ 20 percent of our budget ”“ because of our failure to rein in spending. Common-sense ideas like shifting social services to nonprofit providers, combining or eliminating 23 state agencies, and resetting discretionary spending to 2007 levels would have gone a long way towards solving Connecticut”™s financial problems.”
At deadline, business groups were still analyzing a passel of new laws for their opportunities and threats to commerce. Among other changes, the lawmakers created a streamlined environmental permitting process; a loan forgiveness program for Connecticut graduates pursuing careers in health and environmental technologies; and a pilot program to help manufacturing companies improve the operational and energy efficiency of their plants.
“Legislators took several positive steps to help improve our economy, public education, and the regulatory climate in Connecticut, which will make the state a more attractive place for business investment and job creation,” said John Rathgeber, CEO of the Connecticut Business & Industry Association, in a prepared statement. “But they did little to secure the state”™s fiscal health. They borrowed money, deferred payments, increased spending and relied on federal stimulus funds to close more than half of the remaining 2011 deficit. The next Legislature must address the state”™s long-term fiscal problems by reforming state government to make it smaller, less expensive and more effective in order to meet the challenges of the future.”
