State Budget Problems To Follow Connecticut Into The New Year

December 29, 2009

Governor M. Jodi Rell’s veto of the legislative majority’s pre-holiday deficit mitigation plan sends a clear message to legislators, along with Connecticut’s families, businesses and all other interested parties, that cutting state spending is the only responsible, acceptable, way to address the state’s ongoing fiscal problems.

I applaud her rejection of what she called a “feeble” attempt to reduce spending. I joined every other Republican, and even some Democrats, in voting against the legislative majority leadership’s plan that called for cutting only about $12 million in actual spending and delaying planned changes in the state’s estate tax. It is indeed a feeble plan when you consider that Connecticut has a projected budget deficit of $337 million to $550 million. Connecticut residents deserve better – and they should be relieved that the Governor refused to take the easy way out by signing legislation that is, at best, inadequate.

Predictably, the General Assembly’s Democratic majority leadership is scathing in its criticism of the Governor’s veto of their plan. Considering that Democrats outnumber Republicans in both legislative chambers, it will be interesting to see if they go beyond rhetoric to attempt overriding the Governor’s vetoes – and, even more interesting to see if they can cobble together enough votes among their own caucuses to succeed. Certainly, there were Democratic legislators who did not like the bills enough to vote for them the first time.

These are the facts. Both Governor Rell and Republican legislators offered comprehensive deficit mitigation plans that called for real, significant, cuts in state spending. The legislature’s Democratic majority refused to consider either plan. Meanwhile, Governor Rell is doing what she legally can in the absence of legislative approval to address the state’s budget problems. She is asking the state employee unions to discuss ways their members can save the state money beyond their earlier agreement to produce $700 million in savings. The state Office of Policy and Management, under her direction, has become a clearing house for surplus property that could be sold to raise money. And, Governor Rell is already cutting state spending to the extent she is able without first obtaining legislative approval.

The reality is that Connecticut cannot tax its way out of the deficit. For one thing, tax revenues are already down; the money simply is not there. Furthermore, attempting to impose higher taxes will simply discourage existing business owners and would-be entrepreneurs from investing their wealth in our state to create and retain jobs. Keep in mind that Connecticut has already lost more than 85,000 jobs during this recession. Connecticut cannot responsibly borrow beyond what we already have in an attempt to avoid cutting spending; Moody’s has already downgraded the state’s credit rating outlook from stable to negative.

Clearly, as the Democratic controlled legislature has repeatedly demonstrated its unwillingness to cut spending, it is time to try something new. Existing state law permits the Governor to make rescissions when a state budget deficit exceeds one percent of the General Fund. In that case, she can now rescind up to three percent of the total appropriation from any fund, or five percent of any appropriation.

Governor Rell wants the General Assembly to pass legislation increasing her rescission authority. Her proposal calls for allowing the Governor to rescind up to six percent of the total appropriation from any fund, or 10 percent of any appropriation, when the budget deficit reaches three percent. She wants to allow the Governor to rescind up to 10 percent of the total appropriation of any fund, or 15 percent of any appropriation, when the budget deficit reaches five percent.

Governor Rell’s proposal is sensible, responsible and appropriate. If the General Assembly is not willing to cut state spending when cutting spending is necessary, then the Governor must have the power to do so herself.

As always, I am ready to work with Governor Rell and my legislative colleagues, both Republicans and Democrats, to address our fiscal problems and adopt a responsible plan to both abolish the deficit and restore prosperity to our state. Meanwhile, I am interested in hearing what you have to say about Connecticut’s ongoing budget problems. . I can be reached at my legislative office in Hartford at 1-800-842-1421 or via e-mail to [email protected]