Budget Woes Promise To Overshadow Session

By Susan Haigh

Associated Press

HARTFORD — When state lawmakers returned to the Capitol on Wednesday, they were greeted with the daunting task of having to fix the largest budget shortfall in recent Connecticut memory.

Besides the current fiscal year deficit, estimated at anywhere from $193 million to $356 million, the next two fiscal years that begin next July 1 are predicted to be about $6 billion in the red.

And considering some experts believe Connecticut’s economy was in recession months after the nation’s economy, those deficit numbers could worsen as state tax revenues continue to slow.

“This is the worst predicament that we have been in, in anyone’s memory,” said Senate President Pro Tem Donald E. Williams Jr, a Democrat from Brooklyn. “It is not a bump in the road.”

Lawmakers and Governor M. Jodi Rell have said they expect Connecticut’s budget problems to overshadow much of the long, five-month legislative session, when the top priority typically has been to pass a new two-year tax and spending plan.

Representative Christopher Donovan, a Meriden Democrat and the new speaker of the House of the Representatives, said he believes the huge deficit will be one of the first issues taken up by the new General Assembly. Besides a planned January 14 vote on Rell’s latest deficit reduction plan for the current fiscal year, he said he wants the legislative committees to work on the next two fiscal years right away.

The legislature usually waits until the end of the session to complete the state budget.

“We’re going to be moving on the budget issues quickly,” he said. “That’s what is on everybody’s mind and that affects so much of what we do.”

Rell, a Republican, has said she wants to avoid tax increases and state employee layoffs to solve the state’s fiscal woes. But she has also repeated the phrase “everything is on the table” several times publicly.

“Every aspect of the state budget will be affected one way or another,” predicted Williams. “It’s a mistake to say that any line item is a sacred cow.”

State officials are hoping to get some relief from the federal government. Besides money for capital projects, such as bridges and roads, they’re also hoping to receive hundreds of millions of dollars in additional Medicaid funding. Medicaid is one of the state’s largest spending areas.

But Connecticut leaders are quick to point out that the federal government won’t be able to patch the state’s entire revenue hole.

“I don’t want to mislead anyone that this is going to be a fix. It certainly will be a help,” Rell said. “It certainly will not be a fix.”

Rell said she sees the federal stimulus package as “a confidence builder” that will help assure taxpayers something is being done to address the worsening economy.

“We need people to feel we’re doing things in the right way,” she said.

Joe Brennan, senior vice president at the Connecticut Business and Industry Association (CBIA), said the state’s business community hopes the federal stimulus package will provide Connecticut with an opportunity to become more efficient. He said this is a good time for the state to streamline its permitting process for projects, whether it’s environmental permits or other requirements.

“We always hear in Connecticut, it’s always hard to get things done,” he said.

Brennan said he also hopes state policymakers won’t pass legislation that could make life more expensive for Connecticut businesses. For example, CBIA has opposed legislation in past sessions that required paid sick leave, prohibited bullying in the workplace, and opened up the state health plan to municipalities.

“We’re hopeful this is not the year to put mandates and costs onto businesses,” Brennan said.

Donovan, a proponent of opening the state employee health care plan to cities and towns, said he still plans to push his bill this session despite Rell’s veto last year. He said the proposal would be an opportunity to help municipalities save money in difficult financial times by allowing them to participate in a larger insurance pool.

There may be other legislation proposed this session that stems from the financial crisis, such as laws to make it easier for banks to merge or acquire other banks in Connecticut to avoid failure.

Also, the General Assembly could pass additional legislation aimed at helping homeowners adversely affected by the mortgage meltdown. Last year, a package of reforms was passed to create programs to help people struggling to avoid foreclosure.

Other possible issues up for debate include:

*Gay marriage: Now that the state Supreme Court has ruled that gay and lesbian couples have the right to marry in Connecticut, lawmakers will need to decide what to do with the state’s existing civil unions law.

*Highway tolls: The legislature is due to receive a report that examines the issues and options of highway tolls as a way to reduce traffic congestion and raise revenue.

*DCF: Reforms to the state Department of Children and Families will likely be considered in light of several disturbing reports, including the death of 7-month-old Michael Brown Jr last May while in foster care at the home of a DCF employee in Mansfield.

*Bottle bill: Lawmakers are expected to resume the debate over who should keep the unredeemed nickel deposits on soda and beer bottles and cans. The money, estimated at $24 million, now goes to the soda and beer distributors. The state, however, wants the cash to help fill its budget gap.