Capitol Commentary, March 10, 2009

Legislature Acts To Close Current Year’s Deficit

On February 25 and 26, the Legislature approved legislation to eliminate $1.2 billion of the state’s $1.35 billion deficit. The House of Representatives unanimously approved the package and it now awaits final approval from Governor M. Jodi Rell.

In the House of Representatives, the legislation was the product of a bipartisan effort. House Republican legislators defeated proposed cuts for special education funding for towns that were originally included in the package. These measures would have directly resulted in tax increases for local taxpayers.

Many legislators expressed concerns with this package and it certainly does not go as far as I would like toward reducing and streamlining state government. However, I am hopeful that the agreement reached provides positive momentum for dealing with the far more significant budget problem of an $8 billion deficit over the next two years.

By including $168 million in savings that Republicans proposed in our own deficit mitigation proposal, we were able to close a gap of approximately $1.2 billion with no cuts in state aid to cities and towns, no tax increases, and only limited use of the state’s rainy day fund.

Another provision in the package that is good news for 30,000 Connecticut seniors is a change in prescription drug coverage that will save them an average of $1,200 a year on prescription drug costs, while also saving the state money. It makes these seniors eligible for enhanced prescription drug coverage through the federal Medicare Part D program.

The package also assumes a variety of mitigation measures including:
• $372 million in federal funds
• $22 million for a retirement incentive plan
• $49 million in other state employee labor savings that must be negotiated between the Rell administration and state employee unions
• $6 million in rescissions by the Governor
• Establishes the Commission on Enhancing Agency Outcomes to consider the following mergers: the Departments of Mental Health and Addiction Services and Social Services, and (2) the Connecticut Commission on Culture and Tourism, portions of the Office of Workforce Competitiveness and the Department of Economic and Community Development
• Requires bottles of water to have a 5-cent refund for returns – commonly known as the “bottle bill.”
• Reduces commissions paid to lottery ticket agents from 5% to 4%

Finally, I am pleased that New Fairfield First Selectman John Hodge and Kent First Selectman Ruth Epstein returned to the State Capitol on Friday, February 27, for a follow-up roundtable discussion on state budget issues and their impact on towns. Both first selectmen attended the initial roundtable held on January 27 that was hosted by State House Republican Leader Lawrence F. Cafero, Jr.

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