Lawmakers pass bill to help Conn. towns

November 24, 2008 8:03:21 PM PST
State legislators took a $300 million bite out of the state's budget deficit Monday night by passing a mid-year mitigation plan, but it won't be enough to mop up all of Connecticut's growing pool of red ink. Legislative leaders warned that deeper state budget cuts are on the horizon.

"I anticipate that this is not the end of this," said Senate President Donald E. Williams Jr., D-Brooklyn. "This is the beginning. This is the first step."

Monday's plan - based mostly on a proposal offered last month by Republican Gov. M. Jodi Rell - was expected to leave the approximate $18 billion budget for the current fiscal year $250 million or more in deficit. Also, the package does not touch the estimated $6 billion revenue gap over the next two fiscal years.

"Deficit estimates have grown. There's no doubt about that," said Rep. Denise Merrill, D-Mansfield, co-chairman of the Appropriations Committee and the next House majority leader.

Rell said she was disappointed that lawmakers didn't do more to address the growing deficit problem.

"Much more than tinkering around the edges will be required in the weeks and months to come," she said in a written statement. "Far more rigor - and far more backbone - will be required if we are to truly serve the best interests of the people of Connecticut."

Lawmakers passed two bills aimed at addressing the state's financial crisis. One covered $300 million of the budget deficit with an additional $157 million in federal Medicaid funds, a new tax amnesty program for delinquent state taxpayers and nearly $72 million in spending cuts and delays.

It passed the House of Representatives, 141-1, and the Senate, 34-0. The second bill, which passed in the Senate on a 31-3 vote and the House 141-0, is aimed at helping struggling cities and towns.

It would allow municipalities to join forces and make group purchases through the state's Department of Administrative Services to save money. It also would establish one-time local tax amnesty programs, and provide protections for tenants living in foreclosed properties.

Some Republicans, the minority party in the legislature, said lawmakers should be doing more to address the state's worsening fiscal situation.

"We're going to leave here and people are going to say tomorrow, 'Oh you did something,' and I'm not quite sure if we did anything but put it off until another day," said Rep. Craig Miner, R-Litchfield, who cast the lone vote against the legislation.

"We're bleeding financially in the state of Connecticut and we're handing out Band-Aids."

House and Senate Republicans tried unsuccessfully to make further spending changes. There were failed efforts to pass an early retirement incentive program to reduce the state's workforce, and divert some funding to the state's new public financing program for election campaigns.

There were also amendments to reduce the number of legislative workers hired for the session, increase health insurance premiums for lawmakers, and to consolidate special commissions for women, children and minority groups, and increase Rell's ability to cut even more spending.

Merrill said although some of the GOP's ideas might be good ones, it was better to wait for Rell's two-year budget to be presented in February and then hold public hearings on major spending changes, such as agency consolidations.

"We want to hear from the public, what do they think are the priorities of our state," said House Majority Leader Christopher Donovan, a Meriden Democrat who will become House speaker next year.

Democratic leaders decided not to include Rell's proposal to take control of the unclaimed 5-cent deposits for returnable bottles and cans. The money, estimated at $28 million annually, currently goes to the beverage distributors.

The bill instead requires distributors to deposit the money in a separate interest-bearing account. They will have to file a report by March 15, indicating how much money has been collected.

Rep. Cameron Staples, D-New Haven, co-chairman of the tax-writing committee, said that will give lawmakers time to evaluate how much money distributors are collecting and whether the state should try to recapture some or all of it.

The beverage distributors have successfully fought off efforts by state officials to try and keep the unclaimed deposits, saying they need the money to offset recycling costs.

The bill also eliminates the Office of the Business Advocate, a relatively new position currently held by former U.S. Rep. Rob Simmons, a Republican from Mystic. His duties are transferred to the state's economic and community development commissioner as of Jan. 1.

Of the $225,000 budgeted for Simmons' office, $80,000 will be transferred to the state budget office to carry out his duties. It was unclear how the budget cut will affect Simmons' employment.

Senate Minority Leader John McKinney, R-Fairfield, said it seemed like Democrats had political motivations in making that cut.

"It's not lost on our caucus that that one office is something that is held by a former Republican congressman who is active in Republican politics," he said. "We can't do that stuff."

If lawmakers don't make enough cuts or come up with additional revenue before the fiscal year ends on June 30, the remaining deficit will automatically be covered by part of the state's $1.4 billion rainy day fund, Staples said.

"Obviously we want to do as much as we can because the rainy day fund is needed next year," he said.