Budget cuts funds, keeps taxes constant

Connecticut Gov. M. Jodi Rell released a state budget today that was notable as much for the elephantine cuts it proposes as for what it leaves unchanged.

Rell’s proposal would cut 400 state jobs, ask unions for hundreds of millions of dollars in concessions and raise state licensing fees on everything from liquor stores to bakeries. In an address to the General Assembly, Rell said these cuts would allow the state to balance its budget without raising taxes, a pledge she made to state residents earlier this week. Still, her proposal accounts for just $2.6 billion of the estimated $4 billion deficit due to differing revenue projections for the next fiscal year.

Gov. Rell delivers a speech about her budget in Hartford on Wednesday, Feb. 4.
Bob Child
Gov. Rell delivers a speech about her budget in Hartford on Wednesday, Feb. 4.

In her Tuesday address, Rell asked for support in her proposal to eliminate a slew of state agencies.

“Help me as I lead Connecticut to a smaller, more affordable, more responsive government,” said Rell. “It starts with fewer state agencies. My budget eliminates 10 of them. All serve worthy purposes on paper, but all have functions largely duplicated by regular state agencies.”

On paper, Rell’s proposal would leave several funds for municipalities intact. For instance, the Payment In Lieu of Taxes program, one that is vitally important for cities like New Haven, where a substantial amount of property is not taxable, has been preserved at its current level of funding.

But in reality, Senate Deputy President Pro Tempore Toni Harp of New Haven said, $30 million was effectively cut from PILOT funding because the money came from a budget surplus that no longer exists.

Indeed, as Speaker of the House Christopher Donovan noted, the general sentiment among lawmakers is that Rell’s proposal is incomplete. Legislators, he said, are left expecting a supplemental proposal to account for the estimated $3 billion shortfall that the Office of Fiscal Analysis announced Monday.

And interest groups and state employee unions both are concerned by the governor’s promise not to raise taxes. The groups allege the governor is not living true to her promise to examine all options to close the gap, like raising taxes.

Together with the 12 other unions of the State Employee Bargaining Agent Coalition, CSEA/SEIU Local 2001 — a union representing state employees —released a poll last week indicating that 54 percent of Connecticut residents prefer tax hikes on the wealthy and corporations to layoffs and cuts to public services.

“Rell has said over the past few months that everything was on the table,” said Matt O’Connor, communications director for CSEA/SEIU Local 2001. “We have the opportunity for fundamental change, but she is not embracing that.”

Rell’s proposal also reduces the power of a mutually acknowledged third party union negotiations of salaries and benefits , which left the employee unions feeling they were being asked to suffer unfair sacrifices.

Yet New Haven Mayor John Destefano Jr. did not find fault in Rell’s request for union compromises.

“I think the part about expecting union concessions is very realistic,” he said in a phone interview with the News, “and that will be reflected in our budget as well.”

Rell did not pursue across-the-board cuts to Medicaid in her budget, saying instead she was hopeful for assistance from the federal government’s American Recovery and Reinvestment Act. She has drawn criticism unions and legislators alike for raising fees for programs such as the Healthcare for Uninsured Kids and Youth (HUSKY) program.

Rep. Rosa DeLauro of New Haven expressed disappointment toward Rell’s plan.

“There is no question that given the extremely dire budget circumstances facing Connecticut, balancing the budget is no easy task,” she said in a statement. “But now is not the time to balance the state’s budget on the backs of low and middle-income Connecticut residents – many of whom are children.”

Douglas Hall, acting managing director of Connecticut Voices for Children, called the Governor’s proposal “shortsighted,” and expressed dismay that Rell was cutting services to those most in need.

“I am concerned that most of what she is proposing is spending cuts,” he said in a phone interview. “You don’t cut corners on children’s health.”

But Rep. Joe Courtney of Connecticut’s 2nd Congressional District, who serves on the House Education and Labor Committee, acknowledged the governor for continuing funding to education programs.

“She deserves high marks for avoiding cuts to education and investing in our state’s young people,” he said.

The budget includes complete cuts to several local programs, however, including the New Haven Arts Council and the New Haven Festival of Arts and Ideas. A state program to prevent teen pregnancy has also been defunded.

Rell defended the cuts today, saying they are shared burdens.

“My budget provides a blueprint which will guide us and which will preserve the prosperity of Connecticut for our children and grandchildren,” she said. “There is pain and sacrifice in this budget, but it is shared pain and sacrifice. We are in this struggle together, and we will need to work together, to lead together, in deed as well as in word.”

Nicholas Perna, a lecturer in the Department of Economics and a member of Rell’s economic advisory board, credited the Governor with avoiding some of the “smoke and mirrors” used by former Governor Lowell Weicker.

“She proposed a clean budget,” he said. “She did not defer pension fund payments or borrow money for operating costs. She is providing a framework for reconstruction not simple belt tightening.”

Legislators said they acknowledged the proposal as a good first step, despite some flaws. But many said there was work left be done.

As the General Assembly prepares to debate and amend her proposal, Rell offered advice to the legislators.

“We need to act swiftly in these turbulent times, for the families of Connecticut need our help, need our leadership,” she said.

Donovan said he hopes to have a completed budget ready for the Governor’s signature by the middle of April.

Martine Powers contributed reporting.

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