Early Retirement Plan Part Of State Deficit Talks

By Susam Haigh

Associated Press

HARTFORD — Governor M. Jodi Rell on Monday suggested that an early retirement program for certain state employees could be a way to help cover the budget deficit for the next fiscal year.

The Republican governor met behind closed doors Monday with Democratic and Republican legislative leaders to discuss her ideas on how to cover the estimated $730 million in red ink for the fiscal year beginning July 1.

Lawmakers and Rell are hoping to reach an agreement before the session adjourns May 5. Monday’s meeting came days after the General Assembly overwhelmingly passed a plan to cover the current fiscal year’s $500 million deficit.

Rell said she was optimistic the May 5 deadline can be met.

Lawmakers said they planned to discuss the options with leaders of the budget-writing committees and the legislature’s nonpartisan fiscal office.

“It’s everybody’s goal to resolve the budget problems for 2011. The governor has given us ideas,” said Senate President Donald E. Williams Jr, D-Brooklyn. “We’re going to review these and find out what would help or hurt businesses, what would help or hurt middle-class families.”

Legislators passed a two-year, $37.6 billion budget in September, but it quickly became unbalanced as state revenues kept falling because of the poor economy.

Rell offered few details of her latest deficit-cutting proposal on Monday, but she said it did not include tax increases or cuts in state aid to cities and towns.

Republican lawmakers, who unveiled their own plan to tackle the 2011 deficit last week, said Rell on Monday offered an early retirement plan similar to the one they suggested. The GOP proposal affects workers ages 52 to 54 with ten or more years of experience. The Republican plan assumes $64 million could be saved.

About half of Rell’s deficit-cutting plan relies on more than $350 million in additional federal stimulus money, much of which has not been approved by Congress.

Rell also has suggested delaying a second $100 million payment to the state employees retirement fund. A $100 million payment has been delayed to help cover the current year’s $500 million deficit.

Senate Minority Leader John McKinney said it would be better to find a solution that does not defer making pension payments.

“We need to be careful about how much we defer into that fund or we’re simply not going to have the money to pay the retirees as promised,” said McKinney, R-Fairfield.

No agreement was reached on which future revenue streams, such as the keno game or the lottery, to borrow against to raise money to fill a $1.3 billion hole that was included in the budget in September.

Rell said she still supports allowing keno, a gambling game similar to bingo, in restaurants and bars as way to raise the money, but she acknowledged not everyone agrees with her.

Rell also said she does not like a Democratic plan to increase fees for most electric utility customers. Connecticut Light & Power is spearheading the opposition to the proposal, calling it an “unfair and hidden tax” on consumers.