SMART GROWTH BILLS AND CAMPAIGN HERE...
LEFT TO RIGHT ABOVE:  link to "About Town" bills of interest page (as things get rolling, look here for our commentary); link to C.G.A. site for tracking, etc. purposes;  how we organized our watch over this past "Long" Legislative Session;  a GREAT CT movie;  a tree grows in...Connecticut (again).  Majority Party legislators practice up for gambling with our future, during discussion at the Special Session.  Minority Leader has the floor.
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Governor Rell's last State of the State address tries to find the pot at the end of the rainbow...Democrats want budget modification charrette?  Over a cliff for ECS grants?

Bonding debate could spill into 2011 session
Keith M. Phaneuf and Mark Pazniokas, CT MIRROR
August 18, 2010

While the planned New Haven-to-Springfield commuter rail line cleared a big fiscal hurdle Tuesday with $260 million in new state funding, it became the focal point of a new debate about state borrowing likely to be carried over into next year's legislative session.

Though Gov. M. Jodi Rell supports the commuter rail line, one of her fellow Republicans on the State Bond Commission used the project Tuesday to protest a Rell-approved plan in 2009 to borrow $580 million from future capital projects to help government pay its bills.

"My criticism doesn't lie with any of these particular projects. I think they all have merit," Rep. Vincent J. Candelora of North Branford, ranking House Republican on the Finance, Revenue and Bonding Committee and a member of the bond commission, said during Tuesday morning's meeting.

"But my concern is still that ... we're borrowing from our bond projects for the purposes of operating government," he said. "And there really isn't an open and transparent method of doing it. And so I am concerned that we're putting Connecticut's operating accounts upside down."

The governor hopes Connecticut's $260 million commitment, approved 9-1 on Tuesday by the commission, will enable the state to win $220 million in competitive federal transportation grants.

The rail project, which state Transportation Commissioner Jeffrey Parker said could end up costing about $1 billion before reaching completion, was recommended as a crucial economic development tool more than seven years ago by the state's Transportation Strategy Board. It involves providing train service during the morning and afternoon peak travel periods along an existing Amtrak-owned, 62-mile rail line linking New Haven and Springfield and nine other Connecticut communities, including Hartford, between them.

The line is single-track in some locations in Connecticut and double-track in others, including all portions of the line in Massachusetts. Plans call for bi-directional weekday service during both morning and evening commuting periods.

Candelora, who voted in protest against the rail project and every other bond commission agenda item Tuesday, first questioned last week why the $580 million in short-term borrowing - approved in April 2009 when the state was more than $1 billion in deficit - wasn't being used to support the initiative.

Sen. Andrew W. Roraback of Goshen, ranking GOP senator on the finance panel and also a member of the commission raised similar concerns. And though he voted for the commuter rail funding, Roraback joined Candelora in casting a protest vote against $520 million in new bonding for other capital projects.

"I did it to call attention to the impending moment of truth," Roraback said. "When we begin the next (fiscal year) we are going to be very cash poor."

GOP lawmakers already have criticized Rell and the legislature's Democratic majority for ordering $2 billion in borrowing over the past year to cover government operating costs.

State Treasurer Denise L. Nappier, who developed the 2009 borrowing plan, told the commission Tuesday that without that infusion of $580 million, the state could not have paid all of its bills.

With Connecticut mired deep in recession, state government faced a budget deficit of just over $1 billion in April 2009. According to the treasurer's office, that borrowing was needed to lift government's cash balance above $700 million total. Weekly disbursements typically range between $220 million and $1.2 billion.

State government maintains a common cash pool, a system that effectively mingles tax revenues, receipts from fees, licenses and penalties, federal grants, and proceeds from borrowing, in one big account.

Nappier, who also serves on the bond commission, said borrowing against future capital projects enabled state government to receive lower interest rates that it would have received had it sought a more traditional loan to cover operating costs.

Nappier also disputed Candelora's claim that the 2009 borrowing was secretive. "There have been frequent and public briefings on cash flow borrowing," she said, adding one including a discussion between herself and Rell's former budget director, Robert L. Genuario, covered by state cable television public access network.

The treasurer added that her office will refinance the debt next June, taking out long-term notes to pay off the short-term debt. Eventually, she added, all funds borrowed over the past two years will be assigned to specific capital projects.

"It's not rocket science," Nappier told Candelora.

But will the state's cash pool have enough funds available immediately thereafter to replenish capital projects, or even shortly thereafter? Candelora responded, adding that if the economy slips again, it could be years before the capital program is made whole. "I just think we're setting ourselves up for a problem," he said.

After the meeting, Rell said Candelora's concerns "were well taken," noting that state government does not have a cash flow problem now. Although Rell had to sign off on borrowing the money, she appeared to be having second thought Tuesday.

"I truly profess that as I sat there listening to an explanation of this, I'm thinking did we need to do this? Did we not?" the governor added. "The treasurer's office indicated that we did at the time."

Meanwhile, Democratic and Republican lawmakers said the state's emergency borrowing statute should be revisited during the 2011 General Assembly session, which starts in January. With state government facing a $3.37 billion deficit projection for 2011-12, a shortfall equal to nearly 20 percent of current spending, keeping a close watch on all borrowing is crucial, they added.

Roraback said he favors placing new limits on the amount and duration of emergency borrowing that can be ordered without legislative approval. "We have not only the right, but the responsibility to have a much better understanding of how the state manages its cash pool," he said.

Rep. Cameron C. Staples, D-New Haven, co-chairman of the finance committee and also a bond commission member, said disputes of this kind might be avoided in the future simply by providing the commission with regular reports on the cash pool.
Funds approved for New Haven-Springfield line, not for new Metro-North cars
STAMFORD ADVOCATE
Martin B. Cassidy, Staff Writer
Published: 10:42 p.m., Tuesday, August 17, 2010

HARTFORD -- Gov. M. Jodi Rell's administration withdrew a request Tuesday to the State Bond Commission to authorize $86 million toward buying 80 additional M-8 rail cars for Metro-North Railroad's New Haven and Shoreline East lines amid questions from legislators about bond funding.

The 11-member commission pushed along two other major rail-related requests, authorizing bonding of $260 million toward double tracking the 62-mile New Haven to Springfield line, and $140 million toward the New Haven rail yard, drawing the money from more than $2 billion in transportation funding approved by the General Assembly in 2006 and 2007.

Michael Cicchetti, deputy secretary of the state Office of Policy and Management, said he would address questions raised by commission members about the financing of the cars and wants to renew the request at the next commission meeting.

Further delays could inflate the $226 million cost for the 80 cars and additional equipment to maintain the cars because of an "escalator" clause in the contract that could allow Kawasaki Rail Corp. to raise the price based on market conditions, Cicchetti said.

The state has an option to buy the cars for about $2.5 million a piece, which could increase to $3 million or $4 million if the clause is activated by increased prices for steel, labor or other factors, according to the state Department of Transportation.

"This is another phase of purchasing rail cars for the New Haven and Shoreline East lines, and through the work of Connecticut DOT and Metro-North, we've been able to obtain a very favorable rate," Cicchetti said. "There is a very compelling reason to move this item quickly, but not today."

Last week, Rell delayed the scheduled bond commission meeting until Tuesday after commission members state Sen. Eileen Daily, D-Westbrook, and State Rep. Vincent Candelora, R-Branford, questioned why $580 million in short-term borrowing last year, meant to close the state's budget deficit, had not been paid back yet.

Candelora on Tuesday voted against all 29 items on the commission's agenda because of ongoing concerns the state is using money borrowed for capital projects to cover operating costs of government.

"I have no problem with the projects on the agenda, which I would support otherwise, because I'm concerned about how the state is borrowing," Candelora said.

Daily did not return calls for comment.

This month, Rell announced her plan to spend $226 million to buy the cars and equipment, including the cost of outfitting cameras for the new rail cars, 300 of which are already on order.

The $260 million bond approval for the New Haven to Springfield rail line, which did pass, is being made to help bolster a recently submitted DOT application for $220 million in competitive grant funding from the Federal Railroad Administration toward the project, which would roughly double the capacity of the line.

Speaker of the House Christopher Donovan, D-Meriden, said the governor and the Legislature should be recognized for their work on the project, which said he expects would help boost the economies of areas in the central part of the state, such as Meriden.

"This is a historic moment in our state dealing with the past, present and future," Donovan said. "We have rail that goes the length of the state, and we see the opportunity that is here with a possible $220 million promise from the federal government to increase options for travel, cut down use of fossil fuels, reducing urban sprawl, and maintaining Connecticut's diversity between urban and rural settings."

When asked about the total cost of the project, DOT Commissioner Jeffrey Parker said the prospective $480 million in state bonding and federal rail funding could cover most of the work to double-track the line, leaving legislators to choose whether to pursue other improvements, such as electrifying the line, that could boost the total price to $1 billion.

State Sen. Donald DeFronzo, D-New Britain, said that the project was important but that legislators need to realize such a large commitment would affect other projects.

Additional costs of overhauling the line, including the introduction of four new rail stations, are not eligible for Federal Railroad Administration funding.

"The growing pressure on the transportation fund for capital projects means this does come at the cost of our other projects," DeFronzo said.

At the meeting, Candelora voted down the entire slate of appropriations because of his outstanding concerns the state is tapping capital project bonding to cover general government expenses.

Despite concerns raised by Candelora and Daily, the commission approved a request from State Treasurer Denise Nappier to convert $520 million in short-term borrowing into general obligation bonds this fall to maintain the state's cash flow to pay for services not covered by tax revenues.

"If we are bonding for projects, I want to make sure that money is being set aside for those projects and not being used to run the government," Candelora said. "We just don't know whether that is happening or not."

A report from Nappier's office generated in response to questions by Candelora said bond fund balances are part of the state's assets and can be borrowed from in the short term to cover other expenses, but they must be repaid so they can be spent on capital projects.

Nappier said the state would remain able to service its debts on a regular basis and that issuing the general obligation bonds now would let the state take advantage of an American Recovery and Reinvestment Act program that lowers the cost of borrowing.

The $140 million in funding] granted for the New Haven rail yard is in addition to $480 million already approved for $850 million facility to service the new fleet of rail cars.

Last year, the state began work on the $125 million first phase of the project to build a component "change-out" maintenance shop.

The commission also authorized $174.5 million in borrowing for DOT programs, including $33 million for bridge rehabilitation and replacement projects, $40 million for bus and rail facilities, and $2 million in grants for general aviation airports to improve their facilities. 

Other items that were approved included:

$315.2 million toward expansion, renovation and construction of local school building projects statewide.

$500,000 for the Lean Green Manufacturing Initiative, a pilot program to assist companies in making their operations more energy efficient.

$20 million for the Small Town Economic Assistance Program, which provides assistance to towns in Fairfield County towns that do not qualify for other forms of state aid. Towns cannot receive more than $500,000 a year from the program.

$15 million for the Town Aid Road program, which provides funding for paving to state towns.

Bond Commission withdraws funds, citing cash flow problems
Greenwich TIME
Ken Dixon, Staff Writer
Published: 10:32 p.m., Tuesday, August 17, 2010

HARTFORD -- The normally placid State Bond Commission erupted in controversy Tuesday morning amid charges that the state is facing a major cash-flow problem because of diminished tax revenues and less federal support.

Gov. M. Jodi Rell sided with state Treasurer Denise Nappier and down-played the potential danger of converting more than half a billion dollars in bond funds sold for short-term operating costs, into longer-term notes.

But Republicans led by Rep. Vincent J. Candelora of Branford, Sen. Andrew W. Roraback of Goshen, and House Minority Leader Lawrence F. Cafero Jr. of Norwalk, warned that in black-and-white terms, the state is spending more than it is taking in and could be unable to pay monthly bills of $600 million by the middle of next year.

The controversy centered on $580-million in short-term debt approved last year by Rell under her executive powers that Nappier now wants to convert to $520-million in long-term general obligation (GO) bonds.

"The spigot that has the tax revenue is not flowing," Cafero told reporters, charging that the state is in a crisis. "It's dripping. We are getting less money than we've ever gotten before. However, the ladles of water for which we pay all those things are still the same amount of money."

Candelora, who as ranking member of the legislative Finance, Revenue and Bonding Committee is a member of the commission, voted symbolically against all 29 items on the Tuesday agenda, including items as mundane as $275,800 to assist the Cardinal Shehan Center in Bridgeport in replacing its roof.

"My concern does lie with the way our cash-flow structure is created right now," he said, noting that all the state's revenue is put into a single large account, from which inter-fund transfers are made. "My concerns still exist that we're borrowing from our bond projects for the purposes of operating government," he said. "There really isn't an open and transparent method of doing it," Candelora added. "Regretfully I will be opposing everything on this agenda because I think that there needs to be a clear answer to us on the extent that we can fund these capital projects and continue to operate." Nappier assured the commission that the state's cash flow remains steady and the proposed sale of the GO bonds was timed to spread out the state's exposure in the bond market.

"It's not rocket science to know here that of all the expenses we have in state government, we will meet our debt-service payments," Nappier said.

"We are currently in a relative good cash-flow position, but if we do not approve to sell these bonds now, we will not be able to take advantage of the Build-America provision of the stimulus program, which will help to lower the cost of borrowing," she said.

Nappier said the previous sale of Bond Anticipation Notes ordered by Rell and the Bond Commission in April, 2009 was intended to eventually be converted to longer-term general obligation bonds.

"We will not be raising any new funds," she said. "We will simply be changing the terms of the finance from short-term notes to long-term bonds." Nappier admitted that the last time a governor used their power to issue short-term bonds to cover spending shortfalls, was about 20 years ago, during the budget crisis that preceded the passage of the state's personal income tax.

"What we did in April of 2009, was we issued Bond Anticipation Notes," Candelora said. "It was a temporary measure that was necessary in order to make sure there was sufficient cash in our accounts. I don't understand how we're going to continue to pay for all these projects on an ongoing basis while we continue to see the market underperforming where our taxes are certainly stagnating.

Rell told reporters after the commission meeting that Candelora's concerns "were well taken," but the state does not have a cash-flow program.

"These were dollars that were already going to be borrowed that we were borrowing in advance of anticipation of projects that were coming on the bond agenda, but already authorized," Rell said, admitting that, at the time of the initial approval, she was warned by Nappier of a possible cash-flow problem.

She said that federal revenue has fallen off by about $190 million less than budgeted, even as tax revenue has increased slightly.

The regular meeting of the Bond Commission, which allocates money for long-term capital projects, was also marked by the sudden withdrawal of $86.3 million to complete financing of 380 new self-propelled rail cars for Metro North's New Haven and Shoreline East lines.

Rell, who controls the commission agenda, expects the funding to be approved at the next meeting of the panel. She postponed the usually monthly meeting of the bond commission by a week so Candelora could work on getting answers to questions raised last week.

Federal aid rules could be good for towns, bad for state budget
CT MIRROR
By Keith M. Phaneuf and Robert A. Frahm
August 14, 2010

Connecticut's school districts could be in line for a major economic boost this fiscal year, thanks to the new extension of federal stimulus funding - and a political miscalculation by the General Assembly and Gov. M. Jodi Rell.  The $109 million in potential good fortune for local schools also could part of a new $156 million hole in the current state budget.  The problem stems from a controversial decision reached by the Republican governor and the Democrat-controlled legislature  in early May when they approved a $19.01 billion budget for the 2010-11 fiscal year.

Though Congress hadn't reached any final decision on extending emergency federal stimulus grants, state officials assumed it would. So while state officials kept overall funding for the 2010-11 Education Cost Sharing grant program for school districts at $1.9 billion - the same level allocated in the prior year - they increased assumptions about how much federal aid would support it, from $271 million to $370 million on the budget's revenue schedule.

What state officials didn't count on is that the Education Jobs and Medicaid Assistance Act signed Tuesday by President Obama would assign $109 million to Connecticut - but also restrict its use.  Specifically, the act stipulates the additional aid cannot "supplant state funds in a manner that has the effect of establishing, restoring or supplementing a Rainy Day Fund" - the latter being a term typically used to refer to a state's budget reserve.

"The only way it's going to have any effect is to get it directly to the school districts so they can use it to rehire the teachers they laid off," said Joseph Cirasuolo, executive director of the Connecticut Association of Public School Superintendents. "If that $109 million isn't used to rehire teachers, then the federal government is just wasting a lot of money."

Gov. M. Jodi Rell's office only would say Friday that it still is analyzing the rules tied to the additional federal stimulus aid.  But state House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said Friday that the governor told him by telephone that morning that a significant portion, or all of the money, would have to be given to school districts as an additional appropriation. Rell's office declined to comment on Cafero's statement.  So if Connecticut - which already began its 2010-11 fiscal year on July 1 - pledged to spend $1.9 billion on its schools, does it now have to spend $109 million more?

"Connecticut's share has to go directly to the school districts," James Finley, executive director of the Connecticut Conference of Municipalities, said Friday. "The state can't hold onto it to balance the budget."

The Connecticut Conference of Municipalities isn't the only group saying "yes."

"Our belief is that it's not to supplant [ECS] money," said Mark Waxenberg, director of government relations for the Connecticut Education Association, the state's largest teachers' union, representing about 42,000 classroom teachers. "It's money specifically for the purpose of jobs," he said. "Our understanding is it's on top of [ECS] rather than supplanting it. . . . It's a separate grant. I don't see how the state could see this as money to fill out ECS."

Nevertheless, Waxenberg said the distribution of the money "could be a sticking point. I'm hearing the drumbeat that there could be a problem. . . . . It's one of the issues that needs to be addressed by the federal government."

The new federal law gives the governor sole authority to determine how the funds would be distributed, and basically sets forth two options:

Use the state's primary elementary and secondary education funding formula. In Connecticut's case, this means the ECS system.  Or distribute the money with an emphasis on poorer communities following federal poverty guidelines.

State Education Commissioner Mark McQuillan said Friday he has notified local school superintendents that he is reviewing federal guidelines but does not yet have an answer as to how the money will be distributed. "We're studying the problem," he said.

Rep. Cameron C. Staples, D-New Haven, co-chairman of the legislature's Finance, Revenue and Bonding Committee, said, "In the plain language of the legislation it appears the money needs to be transferred to the cities and towns." But Staples quickly added he still is awaiting analyses of the stimulus extension both from the Rell administration and from the legislature's nonpartisan Office of Fiscal Analysis. "I think we're all awaiting some more information from the federal government before we can finalize this."

Robert Rader, executive director of the Connecticut Association of Boards of Education, said, "As to whether [the emergency aid] is on top of ECS or not, we haven't heard anything. . . .School districts would be quite disappointed if it were just used to supplant ECS."

So if Connecticut has to spend an extra $109 million on school districts, it would leave a $99 million hole in its budget, reflecting the federal education aid state officials assumed would be available just to keep ECS grants at last year's levels.

Further complicating matters, Connecticut also was counting on $266 million in additional Medicaid and child welfare grants from the stimulus extension measure. And while it can use those funds to help balance the current budget, the state received just $199 million, or $57 million less than expected, in the actual legislation.

Combined with the potential $99 million education funding shortfall, that problem could leave Connecticut's budget with a $156 million hole less than seven weeks into the new fiscal year.

"I think something like that's always a concern, especially at this early point in the fiscal year, but it is a modest amount," Staples said, adding the primary concern remains whether projected state tax revenues meet expectations later this summer and fall.

House overrides veto, adds $3 million to public funding for governor
By Mark Pazniokas and Keith M. Phaneuf, CT MIRROR
August 13, 2010

The House of Representatives voted 106 to 30 today override a veto of a bill that preserves the state's public financing of campaigns and doubles the general-election grant for gubernatorial candidates.  Today's vote means that Dan Malloy, a Democrat and the only remaining publicly financed candidate for governor, can expect to receive $6 million next week from the Citizens' Election Program, instead of $3 million.

“Today, the Legislature saw fit to preserve a system that gives candidates who aren’t wealthy a chance to compete and the ability to run a campaign that isn't funded by corporate and special interests,” Malloy said in a statement emailed to reporters.

When the bill originally passed on July 30, legislators did not know if the bill would favor a Democrat, a Republican or neither.

The only publicly financed Republican candidate for governor, Michael C. Fedele, lost the GOP primary Tuesday to Tom Foley, a Greenwich businessman who loaned his own campaign $3 million. In the Democratic primary, Malloy defeated Ned Lamont, who gave his own campaign $8.6 million.  House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said the bill was wrongly titled as An Act Concerned Clean Elections. It should have been called "An Act Concerning Dan Malloy," Cafero said.

"In my 18 years in the House of Representatives," Cafero said, he could not recall "the House passing a bill for one man."

A unified Democratic caucus cast all 106 yea votes, five more than needed to override Gov. M. Jodi Rell's veto. The Senate voted to override last week.

Rep. Shawn W. Johnston of Thompson was the only one of the 114 House Democrats to vote against the override. Seven others were absent. All 29 Republicans present voted to uphold the override. Eight others were absent.

Eleven of the 18 Democrats who voted against the bill last month swtiched to override. They are:

Jason W. Bartlett of Bethel, Juan R. Candelaria of New Haven, Paul Davis of Orange, Kim Fawcett of Fairfield, Karen Jarmoc of Enfield, Christopher Lyddy of Newtown, Corky Mazurek of Wolcott, Steven Mikutel of Griswold, Frank N. Nicastro Sr. of Bristol, Kathleen M. Tallarita of Enfield and Elissa T. Wright of Noank.

The bill is a reaction to a court decision that otherwise limits the available public financing for governor, not the result of lobbying by the Malloy campaign.  But some Republicans intend to make Malloy pay a political price for accepting more money from the Citizens' Election Program in the midst of a fiscal crisis.

"The fact that Dan Malloy is rattling his tin cup outside the legislature is absurd. Dan Malloy should be ashamed of himself," said Chris Healy, the Republican state chairman.

Healy stood outside the chamber before the vote with a tin cup, affixed with Malloy's name and photo. It contained coins and a dollar bill.  Beth Rotman, the executive director of the Citizens' Election Program, confronted Healy, who told her he would continue to work for the abolition of the program.  Nancy DiNardo, the Democratic state chairwoman, had offered Healy a deal on limiting campaign expenses.

"If Healy really feels so strongly about limiting the amount of money going into the Citizens' Election Program, here's an idea: if he can convince Tom Foley to abide by a $3 million spending limit in the general, I'm quite certain that I can get Dan Malloy to do the same," she said. "We'll wait for his answer."

Under existing law, Malloy would have ended up with $5.5 million in public financing for the year: $2.5 million for the primary and $3 million for the general election.  Rell vetoed the bill shortly after passage, saying $3 million was sufficient for a general-election campaign. But no candidate has won with so little general-election money in recent decades. Rell spent $4 million on her 2006 campaign, while Gov. John G. Rowland spent $6.6 million in 2002 and $6.9 million in 1998.

The Senate overrode Rell's veto five days before the primary, but the House was unable to round up the 101 votes necessary for an override until this week.  The delay put the House in the position of passing a bill with a provision that benefits only Malloy.

"That perception is terrible," said Rep. John Hetherington, R-New Canaan. "The conclusions that people will draw from that are terrible."

Several of the Democrats who switched defended their votes, knowing that Republicans may use them against them in re-election campaigns.

"I wanted to make my decision based on policy," Rep. Jason W. Bartlett, D-Bethel, said afterward, explaining why he reversed his earlier position and supported the override today. Leaving publicly financed candidates with no option to counter a self-funded opponent who spends huge dollars late in the race "really hobbles anyone participating in the program."

Bartlett added that the legislation enacted today isn't perfect, ‘but time is running out. Much of my consideration was about timing and coming up with a fair process."

Another Democrat who switched positions to support the override, Frank N. Nicastro Sr. of Bristol, said he feared the entire campaign finance system enacted in 2005 to clean up state elections was in jeopardy if nothing was done.

"We needed to do this today to move this whole thing forward," he said. "We can work on it some more in the session next year."

Nicastro disagreed with Republicans who argued most voters would disagree with increasing public grants for gubernatorial candidates. "I truly did a lot of soul searching and talked to a lot of my constituents," he said, adding Bristol residents want to see the current campaign finance system preserved. "They said, ‘Frank, do what you have to do.'"

But Cafero said afterward that the Democrats' intentions will be obvious to the voters.

"I think the people are going to see it for what it was," he said. "The primary substance of this bill was an act concerning Dan Malloy, and no one else."
House vote looms large for gubernatorial hopeful Malloy
Democrat's financial clout rests on fate of campaign finance law veto
By Ted Mann Day Staff Writer
Article published Aug 12, 2010

Hartford - Dan Malloy's victory in the gubernatorial primary was a critical first test for Connecticut's public campaign financing system.

It was the first time a candidate used the Citizens Election Program to run for a gubernatorial nomination, and also the first time it did what its boosters always hoped it would.

The guy who spent roughly $10 million to try to seal up the Democratic nomination, former U.S. Senate nominee Ned Lamont, was defeated by the candidate who stuck to spending limits and used $2.5 million in public grants to run his campaign.

But a new, perhaps larger test looms, and its first section isn't up to Malloy or the Citizens Election Program.

The House of Representatives will convene in special session Friday to consider overriding Gov. M. Jodi Rell's veto of the legislature's proposal to fix constitutional problems with the campaign finance law identified by the 2nd U.S. Circuit Court of Appeals.

If the override is successful, Malloy will get a $6 million campaign grant for his general election campaign against Republican Tom Foley, a multimillionaire who is not participating in the program and could spend freely on direct mail and television.

If the override fails, Malloy will be stuck to the existing base grant amount - $3 million - but will not get the supplemental grants that candidates under the original law receive if they are outspent by an opponent. Those supplemental payments were ruled unconstitutional by the Second Circuit.

In the afterglow of his primary win, however, Malloy deflected a question on the subject.

"I haven't even thought about it," he said.
Senate Passes Campaign-Finance Law Fix; Rell Promises Veto
Hartford Courant
By DANIELA ALTIMARI
10:07 PM EDT, July 30, 2010

HARTFORD —

Amid one of the most contentious election cycles in years, lawmakers labored through the day Friday in an attempt to fix the state's campaign finance law, deemed unconstitutional by a federal appeals court. The Senate approved the changes Friday night and sent them on to the House.

The repair put forth by the legislature's Democratic majority and approved by the state Senate along party lines Friday night restructures the taxpayer-funded Citizens Election Fund and increases the size of the grants to those running for constitutional offices. In the case of gubernatorial candidates, the grants would double from $3 million to $6 million.

But Gov. M. Jodi Rell, who has called campaign finance reform and clean elections a key part of her legacy, vowed to veto any measure that raises the ceiling on grants.

"I cannot in good conscience endorse an additional $6 million in public funding that will be used by candidates to bombard each other — and the public — with a relentless series of negative messages from now until November,'' Rell said in a statement. "The public is already fed up with the nasty, negative campaign ads that are playing almost non-stop on TV and radio. Now legislators want to give away even more public funds — as much as $6 million — to keep these attacks going.''

The state's landmark public financing law provides public campaign financing for candidates for state offices. It has two aims: To clean up politics by placing limits on contributions by lobbyists and government contractors, and to level the playing field for candidates facing multimillionaire self-funders.

"We shouldn't limit the possibility of getting elected and getting your message out to those that have vast fortunes," Senate President Pro Tem Donald Williams said. Like other Democrats, he called on Rell to reconsider her promised veto.

Campaign finance was the sole item on the agenda for the special session. The Senate vote came just after 7:30, more than three hours after the debate began. The 23-12 vote broke along party lines; Sen. Joan Hartley, a Waterbury Democrat who is often a swing vote, was absent. The House of Representatives convened at 8:15 p.m. but had not taken a vote by press time.

Caucusing, Spinning

The day was filled with closed-door caucusing and spinning in front of the television cameras. At one point, Sen. Republican leader John McKinney of Fairfield started a press conference by playing two ads by gubernatorial candidates Dannel Malloy, a Democrat, and Michael Fedele, a Republican. Malloy and Fedele are each facing multimillionaire candidates in the Aug. 10 primary and are participating in public financing.

"Here we are today in the face of our worst economic recession and they want to increase spending $6 million,'' McKinney said. "Boy, these food banks could use that $6 million. … our homeless shelters could use that $6 million, kids in our inner cities could use that $6 million. But, no, we're going to feed it to politicians to run that crap. That is wrong.''

The funds, however, have already been allocated to the Citizens Election Fund.  The surreal nature of the proceedings was underscored by the fact that Fedele, in his role as lieutenant governor, presided over the Senate debate, whose outcome would have an important impact on his gubernatorial candidacy.  Republicans in the Senate offered several amendments, including one that would have shifted the taxpayer money earmarked for campaigns to cash-strapped food pantries. The proposal was shot down.

Senate Majority Leader Martin Looney, D-New Haven, said earlier this week he was confident that lawmakers would have enough votes to override Rell's promised veto.

The U.S. 2nd Circuit Court of Appeals on July 13 upheld the heart of the sweeping public finance and reform law. But the court concluded that key components amounted to a violation of political free speech.  The court struck down a complete probation against political contributions by lobbyists. And it ruled that two of the law's financing provisions were illegal. The "trigger provisions" released supplemental campaign grants to publicly financed candidates who are widely outspent by privately financed opponents or are the subjects of special-interest attack ads.

The court ruled that a blanket ban on lobbyists' contributions was unconstituitional. The legislature's remedy allows lobbyists to donate up to $100 to candidates. Lobbyists are also permitted to solicit clients for political donations during the current election cycle, but that practice will be banned starting in January 2011. Lobbyists are also banned from making political contributions during the legislative session.

Copyright © 2010, The Hartford Courant
Lawmakers Plan Friday Session To Save Campaign Finance Law
By EDMUND H. MAHONY, emahony@courant.com
8:09 PM EDT, July 28, 2010

When the state legislature meets in special session Friday in an effort to salvage the state's landmark campaign
finance reform law, it likely will remove three key provisions that a federal appeals court found unconstitutional
earlier this month.

Legislative leaders plan to continue working through Thursday to choose among draft proposals to replace the
legally defective parts of the law and expect to have proposed legislation prepared by Friday.

"We had our meeting of course with the governor and the Republican leaders today and there is, I think, a significant
amount of agreement," state Senate President Donald Williams, D-Brooklyn, said. "We want to preserve the system,
therefore we are in agreement to sever those parts of the statute that the court had problems with."

The U.S. 2nd Circuit Court of Appeals on July 13 upheld the core of the sweeping public finance and reform law,
which provides public campaign financing for candidates for state offices. But the court concluded key components
amounted to a violation of political free speech.

The court struck down a complete probation against political contributions by lobbyists. And it ruled that two of the
law's financing provisions were illegal. The "trigger provisions" released supplemental campaign grants to publicly
financed candidates who are widely outspent by privately financed opponents or are the subjects of special interest
attack ads.

Williams said the revisions to the law likely will replace the ban against lobbyist contributions with some sort of
limiting restriction on what and how they can contribute. One proposal would bar lobbyists from bundling campaign
contributions, Williams said.

He said late Wednesday that there is not yet consensus on how to replace the trigger provisions, which were written
as an incentive to draw underfunded candidates into races against well-heeled opponents.

Williams said the simple solution would be to increase the initial public grant to candidates accepting state financing
under the part of the law known as the citizens election program. Participating gubernatorial candidates now get
 initial grants of $3 million for general elections. The trigger provision would have provided them with supplemental
grants of up to $3 million more.

But increasing the initial grants is likely to hit a road block in Gov. M. Jodi Rell's office. Her staff said Wednesday
she is "adamantly" opposed to increasing the initial, $3 million campaign grants for budgetary reasons.

"That is more than enough," Rell said in a radio interview recorded and distributed by her office. "And if their
opponent is very, very wealthy and wants to spend $20 million, what are we going to do? Give them $8, $10,
$12 million, $20 million? The answer is no."

Williams said legislators — many of whom are now campaigning on public money — want to uphold the law's
original intent.

"It certainly was not our intent to keep candidates running for statewide offices having their grants absolutely frozen
at the lower level, in the governor's race at the $3 million level," he said.

Williams disputed Rell's contention that raising the initial grants, already factored into current state spending, could
create budget problems. He said the original law and current budget contemplated, for example, that gubernatorial
candidates would receive as much as $6 million.

"So those funds are available and we want to see if we can live up to the original intent," Williams said.

The top six leaders of the legislature met with Rell Wednesday.

Afterward, Rell said, "All of those candidates that are in the clean elections program were counting on the trigger
mechanism if they had a wealthy opponent spending all kinds of money. I am not supporting raising that threshold."

Despite the appeals court ruling, the part of the law that triggers release of supplemental campaign money has been
in force through the primary campaigns.

Currently, gubernatorial candidates qualifying for public financing in primaries get a base grant of $1.25 million and
then a subsequent grant of another $1.25 million — depending how much their opponent spends. Lt. Gov. Michael
Fedele and former Stamford Mayor Dannel Malloy each have received $2.5 million for their campaigns.

Conn. strikes back
NYPOST
Last Updated: 5:08 AM, July 25, 2010
Posted: 12:23 AM, July 25, 2010

Connecticut Gov. Jodi Rell is going to war, it seems, in an effort to lure New York hedge funds to her state.

Who can blame her?

Albany, after all, attacked first — by moving to wrest millions in tax revenue from her state and New Jersey.

In the end, alas, New York might turn out to be the big loser.

As The Post noted Thursday, Rell’s rolling out the red carpet for hedge-fund bigwigs, offering to meet them over dinner at a fancy Darien steakhouse. She wants to discuss “Connecticut’s advantages” — particularly in the face of Albany’s plan to tax hedge-fund managers who live outside New York.

“I am personally inviting you and a few of your colleagues to meet with me,” Rell wrote in a letter to the New York Hedge Fund Roundtable’s president. ”We have much to discuss.”

Gov. Paterson first proposed the lame-brained scheme for last year’s budget. His idea: to tax “carried interest” (i.e., investment profits) of hedge-fund managers who work here but live out of state.

Such earnings are now taxed by the states where the managers live, not where they work. But Albany, short of cash for its massive spending machine, has now warmed to the plan.

If it passes, Connecticut and Jersey would face a tough choice:

n Do nothing — and leave hedge-fund commuters liable for tax in both their state and New York, a double hit that may well be challenged in court.

n Scrap their own tax — and lose an estimated $50 million in revenue to Albany.

n Try to lure the hedgies out of the city — and skirt the entire mess.

Rell seems to be choosing Door No. 3.

That’s understandable. But if she succeeds, say good-bye to another of New York’s golden geese. The firms would take jobs, business and tax revenue with them.

Which is why Mayor Bloomberg’s furious, calling the tax “the best thing that ever happened to Connecticut.”

“What am I going to say to her?” Bloomberg asked. “Raise your taxes? She’s going to say to me, ‘Hey, bozo, you guys should cut yours.’ ” He’s right.

He’s also been begging major hedge-fund honchos to stay in the city. Final action on the tax is brewing in the Legislature. The uncertainty over it alone is enough to prompt firms to skedaddle.

If they do, though, don’t blame Rell.
On another note...
Modest good news, despite the deficit
Keith M. Phaneuf, CT MIRROR
July 21, 2010

The state got some welcome economic news Tuesday--an estimate that the surplus for the fiscal year that ended June 30 has jumped to $393.3 million, up nearly $150 million over the past month--but hardly enough to offset the massive deficit bearing down on the state 12 months from now.

The increased surplus reported by Gov. M. Jodi Rell's office will enable state officials to reduce by nearly 25 percent about $956 million in controversial borrowing authorized to cover current expenses without further spending cuts or tax hikes.

That still leaves the state facing is a $3.37 billion shortfall projected for the 2011-12 fiscal year, a deficit equal to 18 percent of current spending and 8½ times the size of this new surplus.

"After a long and difficult slog, our economy is showing some positive signs," Rell said Tuesday, adding that modest job growth over the past six months has helped reduce the state's unemployment rate to 8.8 percent. It stood at 9.2 percent back in March according to the state Labor Department.

The "positive signs" that contributed to the recent surge in the 2009-10 surplus center on a $108 million increase in revenue forecasts, including a $39 million from the sales tax , $20 million from licenses, permits and fees, $13 million from the insurance industry tax and $10 million from federal grants.

Though the 2009-10 fiscal year ended on June 30, various taxes continue to accrue over the summer and state Comptroller Nancy Wyman will not officially close the books on the fiscal year until October.

Rell and the legislature used a portion of the 2009-10 surplus, $139.3 million, to help support spending in this fiscal year's $19.01 billion budget.

But the Republican governor also insisted that the Democrat-controlled legislature dedicate any further surplus to scale back a controversial plan to balance 2010-11 by borrowing $955.9 million. Added to that borrowing would be $34 million in issuance costs and $141.6 million in interest charge for a total of $1.3 billion, according to the legislature's nonpartisan Office of Fiscal Analysis.

That debt would be paid off over the next eight years with a surcharge on monthly electric bills and by raiding an energy conservation fund.

The new surplus number means state government would need to borrow just under $702 million in principal, or 23.4 percent less. It was unclear late Tuesday how much bond issuance and interest charges might be reduced.

Both Rell, who is not seeking re-election, and the legislature, have been criticized by many of this year's gubernatorial candidates - including Lt. Gov. Michael C. Fedele - for using financing rather than further spending cuts or tax increases to balance the budget.

"All too many Connecticut families are struggling and the pain is not yet over because the recovery is just beginning," Rell said, adding that the prospect of reduced borrowing "is good news for every Connecticut family."

But economists warned that this "good news" is tempered by a surplus created, in part, through artificial means, and by an economy that is rebounding very slowly.

"I don't think we can say, in any way, shape or form, that we are out of the woods," said Peter Gioia, chief economist for the Connecticut Business and Industry Association, who added he believes it will take at least four years to recover all of the roughly 100,000 jobs the state lost since the last recession began in March 2008.

But in the meantime, Rell's successor and the next legislature must solve a fiscal crisis much larger than the new surplus.

The same budget that yielded a $393 million surplus was propped up with more than $1.9 billion in emergency state reserves and federal stimulus grants.

Another $914 million from those emergency sources will be used, along with the planned borrowing, to take the place of tax hikes or spending cuts this year.

Those emergency sources, which will be exhausted before the next governor's first budget takes effect, are the primary factors behind the nearly $3.4 billion hole in 2011-12.

Further complicating matters, legislative analysts already have assumed state revenues will first jump by nearly 6 percent over the coming year. In other words, it will take healthy revenue growth just for state government to be $3.4 billion in debt.

"These new surplus numbers don't tell me we're going to exceed what are already aggressive estimates" for revenue growth, Gioia said. "What we have right now is a continuation of slow growth and it's slow enough growth that it's going to raise continuing challenges."

The governor's own chief economic adviser also urged caution Tuesday when assessing the state's economy.

"All of the indicators we're looking at say we're looking at a state economy that's coming back inch by inch as opposed to yard by yard," said Don Klepper-Smith, chief economist and director of research for DataCore Partners in New Haven and chairman of Rell's Council of Economic Advisers. "We've yet to see signs of robust job growth."

Klepper-Smith added that consumer confidence numbers remain "on the soft side."

The U.S. Consumer Confidence Index, which measures consumer optimism monthly by analyzing trends in savings and spending, entered July at 52.9 percent, well below a healthier level in the mid-70s.



VETO PACKAGE - JUNE 21, 2010:  6 of 9 OVERRIDES DONE.


Legislators override six vetoes
Mark Pazniokas, CT MIRROR
June 21, 2010

The General Assembly Monday overrode Gov. M. Jodi Rell on six of the 13 bills she vetoed in the 2010 session, her last regular session before stepping down as governor in January.

The bills re-passed affect criminal background checks, sentencing policies, off-track betting, environmental permitting procedures, licensing for social workers, and a Stamford parking garage.

The only close vote today was on a master transportation plan that Rell vetoed over what the governor called an unaffordable provision to repair and replace a parking garage at the Stamford commuter rail station. It passed 25 to 11 in the Senate, one more than the minimum required.

The other bills passed easily as Rell, a lame-duck Republican, showed little evidence of working to have the Republican minority sustain her vetoes. Her chief legislative liaison already has left her administration.

"Obviously I am disappointed with the overrides," Rell said. "When I veto a bill it is after careful consideration and because I feel the legislation represents bad public policy, is too expensive or creates more bureaucracy. My vetoes were prudent and just decisions and I stand by them. However, lawmakers have voted their will. While I do not agree with their decisions, I respect their right to make them. It is part of the process and so now we must move on."

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, said he told Democratic leaders that Republicans would debate at length any bill that had substantial GOP opposition during the regular session. The warning prompted Democrats to give up on re-passing a bill that would have allowed public-housing residents to elect tenant representatives to housing authorities.

Municipal officials now appoint the tenant representatives.

Overriding a veto requires a two-thirds vote, 101 in the House and 24 in the Senate. Democrats have 114 members in the House and 24 in the Senate, but Republicans have influence beyond their numbers during veto sessions.

The veto sessions typically last a single day, meaning the Republicans can stall if they are not consulted on overrides by the Democratic majority.

"You don't need my votes," Cafero said. "You need my cooperation."

The six overrides represent 46 percent of the 13 bills Rell vetoed, the highest percentage in her six years as governor. Last year, the legislature overrode seven of 24 vetoed bills, or 26 percent. They overrode none of 10 in 2005, none of three in 2006, one of seven in 2007 and two of six in 2008.

Her predecessor, John G. Rowland, vetoed 39 bills in 10 legislative sessions. The legislature overrode none.

Rell's relationship with Cafero and other legislative Republicans has been strained.

The bills becoming law over Rell's veto will:

• Ban state hiring managers from asking applicants about their criminal backgrounds or researching their histories until the last step of the hiring process. The override vote was 120 to 19 in the House and 31 to 5 in the Senate.

Proponents said that the ban will allow applicants to be judged on their skills. State managers still can use a felony conviction to deny an applicant, if the conviction was relevant.

• Create a state 23-member sentencing commission, which would operate without new expenditures, to review sentencing policies and recommend changes. The House vote, 130 to 9; Senate vote, 27 to 9.

• Allow off-track betting with televised simulcasting to expand in New London, Manchester and Windham. The state now has a dozen simulcasting facilities. The House vote, 110 to 28; Senate, 26 to 10.

Rell said in her veto message she was "troubled that these authorizations are being requested for particular restaurants or venues as quick fixes to a difficult economic climate and to offset low customer counts."
Sen. Edith Prague, D-Columbia, a gambling opponent who originally voted against the bill, reversed herself during the veto session at the request of business groups desperate for any job creation.

"I'm not for gambling, but I'll take any jobs they offer," she said.

• Revise environmental permitting procedures. Rell said the bill was sound, except one provision written to allow a transfer station to be built in Newtown near a watershed. Rell said it could affect 19 facilities. The House vote, 140 to 0; Senate, 36 to 0.

• Create a new license for a "master social workers," to be administered by the Department of Public Health. The House vote, 138 to 1; Senate, 34 to 2.

• Amend the master transportation plan, including a controversial provision affecting the Stamford Transportation Center. House vote, 138 to 0; Senate, 25 to 11.
Senate Approves Extension Of Conveyance Tax; Foreclosed Homes Exempted From Conveyance Tax For First Time
Hartford Courant
Christopher Keating  on June 21, 2010 3:13 PM

Cash-strapped homeowners who are forced to sell their homes would gain some relief under a bill approved Monday by the state Senate.

Homeowners who are losing their homes to foreclosure will no longer be forced to pay the municipal portion of the conveyance tax. Currently, the municipal portion amounts to $420 on a $300,000 home.

The exemption was sought by the state's Realtors in a radio commercial that played in recent days and asked listeners to call their legislators in order to pass the exemption.

The foreclosure provision was part of a larger bill that extended the municipal portion of the state's tax on real estate transfers for one year.

Without the extension, the portion of the tax that is directed to cities and towns would expire as of July 1. The issue had prompted a battle over the past seven years between real estate agents and the Connecticut Conference of Municipalities, which represents most cities and towns. CCM strongly favors the tax because it generates about $25 million annually for cities and towns.

The Senate voted, 32 to 4, before 3 p.m. for the one-year extension. Four Republicans - Senators Dan Debicella of Shelton, L. Scott Frantz of Greenwich, Toni Boucher of Wilton, and Anthony Guglielmo of Stafford Springs - voted against the measure.

"People have seen the prices of their homes drop 10, 20, 30 percent since they purchased them, and now we're going to be hitting them with an additional tax,'' said Debicella, who is running for Congress in the Fourth Congressional District against Democratic incumbent Jim Himes. "I cannot do this to the homeowners of Connecticut.''

Guglielmo said the leaders of the 13 towns that he represents have worked hard to control spending.

"I think it's a very unfair tax - the conveyance tax,'' Guglielmo said on the Senate floor. "Most people don't expect it when they go to a closing. ... Then we whack them with a pretty heavy burden.''

The issue was debated in a special session Monday because the state Senate failed to vote on the matter during the final, hectic minutes of the regular legislative session that ended in early May. The state House of Representatives had already passed the bill, and many lawmakers assumed there would be enough time for a vote in the Senate. Republican Gov. M. Jodi Rell has pledged to sign the extension.

Senate President Pro Tem Donald Williams said the legislature had taken important action Monday regarding the foreclosure crisis in Connecticut.

"The effects of a foreclosure extend beyond the homeowner and can impact property values and public safety throughout the neighborhood," Williams said in a statement. "No part of Connecticut has been hit harder than Windham County and that needs to change. Our bipartisan jobs bill will make a difference and so will the legislation we passed today. These measures are another weapon in the fight against the foreclosure crisis in Connecticut."

Nicholle Dagata of the Connecticut Association of Realtors said, "On behalf of homeowners across the state who are struggling to make ends meet, we thank the state House and Senate for doing the right thing and providing relief from the real estate conveyance tax for homeowners selling at a loss and in foreclosure. The Realtors understand that these are difficult economic times, and we applaud the General Assembly for balancing the needs of the municipalities that collect the tax with the homeowners across the state who are most vulnerable. The temporary tax increases have been extended for one more year and we are happy to see they will sunset next July."

First audit finds problems at campaign finance agency
Jacqueline Rabe, CT MIRROR
May 28, 2010

The state agency responsible for dispensing millions of dollars in public grants for candidates to finance their campaigns received a harsh audit last week.  State Auditor Robert G. Jaekle said several findings in the 15-page audit of the State Elections Enforcement Commission are common, but three critiques stand out.  Among other things, the auditors found that nearly $200,000 in expenses for equipment or services lacked documentation.

In a review of 25 expenditures during the first three fiscal years of the campaign finance system, SEEC did not have the proper receipts and paperwork on two occasions, or 8 percent of the time.
The state paid $192,261 to a private contractor for information technology, and no SEEC supervisor approved the purchase or verified that the amount billed represented services rendered, according to the audit.

"That is uncommon," Jaekle said. "It is possible the state paid much more than what it actually got."

The SEEC had weeks to produce the documents to prove they were accurately billed, he said.  The state also paid $4,190 for electronic data equipment but only had receipts for $599 worth of equipment.

"We found the agency paid for something and did not check what they were being billed for," Jaekle said. "They might have paid for something they didn't get. I'm am not saying that's what happened, but it opens the door to questions when the proper documentation is not there."

Another uncommon critique is an agency policy that allowed managers to work an alternate work schedule, different from the 40 hours over five days required by state law. For example, managers were being allowed to work four days in one week as long as the 40 hours were completed.

"That is unique and it's not permitted," said Jaekle. "It's hard to track hours worked if someone is allowed to come in and leave at different times every day. It could mean they are getting credit for hours not worked."

This is the first state audit of the SEEC since the inauguration of the state's public campaign finance system in 2005. The good news for the agency is there were no criticisms of the grants being awarded to candidates, which is where the agency spends the bulk of its money. That doesn't mean there weren't some discrepancies. It just means they weren't any in the small sample the state auditors reviewed. The SEEC also has a comprehensive auditing system to review grants paid.

The agency has $38.5 million cash on hand as of May 30 to spend on grants for the upcoming election cycle. Additionally, the administration side has a $5.1 million budget for its 53 workers and other expenses this year.  Nancy Nicolescu, spokeswoman for the SEEC, said all the problems outlined in the audit have been addressed and solved.

"Yes, it's fixed," she said. "The SEEC has implemented the appropriate protocols necessary to validate the receipts of services... before the disbursement of state funds."

The agency has also hired a new fiscal administrative manager "to ensure the agency is fully compliant," she said.

David Barry, who was previously in the fiscal office at the Department of Corrections, was hired three months ago.  The SEEC also has a new executive director - Albert Lenge - since the audit was completed, replacing retired Jeffrey B. Garfield.  State legislators were quick to defend the SEEC.

"They've come light years since the time this audit began," Sen. Gayle S. Slossberg, D-Milford, co-chairwoman of the Government Administration and Elections Committee, said.

The fact that this was the first audit to be released in more than four years does worry Slossberg though. There is no date set for when the next audit will be completed, but Jaekle said he expects it to be at least two years, but probably closer to three years.

"I think that it's something worth talking about if we are doing audits enough," Slossberg said. "I think the accountability should be there. But if it's just a duplication or redundant that may not yield us any different results then I am not sure it's needed."

Larger offices, such as the comptroller's office and the Department of Social Services, do have annual audits.

"We have two options; look at the procedures to make sure the recommendations in the audit are being made or you start to ask the question if one agency should be handling all of the administrative work regarding receipts. ...That might be a policy worth pursuing," Slossberg said.


2010 VETO SESSION NEWS...

Rell veto of Conn. energy bill riles critics
By Luther Turmelle, North Bureau Chief
lturmelle@newhavenregister.com
Wednesday, May 26, 2010

Gov. M. Jodi Rell vetoed a sweeping energy bill that the General Assembly passed during the waning hours of this year’s legislative session, saying it would create higher energy bills for consumers and expand government bureaucracy.

Supporters of the bill said it would reduce the state’s electric rates by 15 percent, but Rell said the bill was “eerily reminiscent” of the claims made by supporters of the law that deregulated the electric generation business in the state in 1998. Supporters of that legislation, the governor said, promised that it would reduce the state’s energy rates, but they remain the highest in the country.

“In the midst of both this great recession and our well-known state budget challenges, I cannot ask our already over-burdened and over-taxed residents and businesses to bear the additional burden of costs associated with this bill,” Rell said.

Overriding a gubernatorial veto would require a special legislative session and the support of two-thirds of the members of the House and Senate. State Sen. John Fonfara, D-Hartford, a co-author of the energy bill, said that because a veto has occurred, lawmakers are required by state statute to hold a special session to determine whether an override is possible.

“The response we get from the public, once they hear what the governor has done with a stroke of her pen, will determine whether the lawmakers who voted against this (at the end of the session) change their minds,” Fonfara said.

Fonfara criticized the governor for claiming there was “a lack of transparency” associated with the creation and crafting of the bill, which was done late in the session.

State Attorney General Richard Blumenthal criticized the veto, saying, “I am deeply disappointed by Gov. Rell’s veto of landmark legislation to lower the state’s record electricity rates — highest in the continental United States — and jumpstart green energy. The governor gave Big Power a gargantuan gift.”

Environmental groups, along with the two Democrats who want to become the next governor, also criticized Rell’s veto.

Dan Malloy, the party’s endorsed candidate for governor, called Rell’s veto, “a mistake, plain and simple.”

“The rates paid by Connecticut industries are nearly double the national average,” Malloy said.

Ned Lamont, the Greenwich businessman who will challenge Malloy in a primary this summer, said “in less than a month, our governor has twice thwarted Connecticut’s ability to compete in the fast-growing green energy economy.”

“It comes shortly after her gimmick-laden budget raided the Connecticut energy conservation fund,” Lamont said.

Chris Phelps, program director for the group Environment Connecticut, said Rell is “standing with utilities and big energy companies at the expense of Connecticut’s environment, families and clean energy entrepreneurs.”

Charles Rothenberger, staff attorney with Connecticut Fund for the Environment, said the governor’s action shows “that the governor’s stated interest in creating Connecticut jobs in the new clean energy economy is nothing more than empty rhetoric.”

Bills 2010 here...

Legislators patch one deficit but fail to guard against future shortfalls
THE CT MIRROR
Keith M. Phaneuf
May 10, 2010

The state legislature balanced the next budget before it adjourned, but some major proposals to build new fiscal safeguards into the appropriations processed died when the session ended last week.

Lawmakers declined to act on proposals to increase by 50 percent the maximum budget reserve - commonly known as the Rainy Day Fund -  that can be set aside to guard against tough economic times, or to increase the governor's authority to order emergency spending cuts without legislative approval.

But the General Assembly did adopt a measure that will require state government to set aside funds annually for the extra, two-week pay period it faces every 11 years.

"I think some people didn't want to increase Rainy Day Fund because they think it will give them less flexibility in the budget, that they'll have less money to spend," Comptroller Nancy Wyman, the state's chief fiscal guardian, said after the session ended last week.

The state currently has authority to reserve an amount equal to 10 percent of annual General Fund spending. The General Fund comprises the bulk of state government's operating expenses, roughly $17.4 billion out of this fiscal year's $18.64 billion overall budget. Wyman's wanted to boost that maximum limit to 15 percent.

Connecticut politicians boasted two years ago when the Rainy Day Fund reached a record-setting $1.38 billion. But that amount didn't represent the maximum allowable savings, being equal to roughly 8 percent of annual operating expenses.

Lawmakers and Gov. M. Jodi Rell emptied that reserve completely in the budget adopted last September, assigning those dollars to compensate for declining tax revenues and prop up spending this fiscal year and next. The legislature and governor still borrowed about $1 billion to balance the next budget, and the state faces a $3.37 billion deficit forecast in 2011-12.

Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, said he backed the proposal to increase the reserve limit, but his committee wasn't ready to adopt it this year.

"It's not a bad idea," he said, adding other legislators were simply more focused on closing the $726 million deficit that had been projected for the coming fiscal year. A revised, $19.01 billion budget enacted last week eliminates that shortfall.

Wyman, who has been lobbying for a larger fiscal safety net for state government for the past seven years, said she would ask lawmakers to consider it once again, noting that national economic experts recommend a reserve of as much as 18-20 percent to guard against a three-year economic downturn.

Rell, who also endorsed a larger Rainy Day Fund limit, tried to get legislators to expand her emergency budget-cutting powers, but that proposal died as well.

"I was disappointed," the governor wrote in a statement Friday. "Fiscal responsibility is rooted in common sense, and this measure would have provided me - and the governors who succeed me - with a critical tool to manage effectively. This was a missed opportunity.  The legislature would be wise to pass this bill next year."

The governor already is empowered to reduce certain accounts by up to 5 percent without legislative approval, though debt service, municipal aid and employees' salaries and benefits effectively are exempt. Rell's proposal would have increased the limit to 15 percent provided the deficit equaled at least 5 percent of the General Fund.

But Geragosian said the Democrat-controlled legislature was wary of giving any governor --not just Rell, who is a Republican--additional authority to act unilaterally, noting that adopting the budget is one of the chief duties of the legislature spelled out in the state Constitution.

"We would rather negotiate those types of extremely difficult budget reductions working with the governor," he said.

Rell added Friday that she would sign the one fiscal reform measure sent to her desk in this session, a measure proposed by Wyman to create a special savings account to prepare for an oddity in the calendar.

State government pays its employees every two weeks, creating 26 annual pay periods. But every 11 years, there is a 27th payroll. Wyman said a typical two-week pay period costs the state $120 million.

In good fiscal times this has not been a problem, as legislators and governors routinely have drawn the funds from budget surpluses. But what happens when the bill comes due when the state is in deficit?

The measure Rell will sign requires state government to create a new account and contribute annual installments equal to 1/11th of the projected cost of an extra payday.

Geragosian said the proposal was based on common sense. "All it requires us to do is set up and account," he said. "Obviously it's easier to handle this if we gradually set the money aside every year."
Senate overlooks conveyance tax bill for cities, towns
Ken Dixon, CT POST Staff Writer
Published: 11:16 p.m., Friday, May 7, 2010

HARTFORD -- In its haste to wrap up business in the waning moments of the legislative session Wednesday night, the Senate failed to take up legislation that would have extended a program generating about $25 million a year in tax revenue for towns and cities.  But Gov. M. Jodi Rell and leaders of both parties in the General Assembly said the miscue will be remedied and the program, which taxes sellers of real estate, will continue.

It is worth about $2 million a year to the city of Bridgeport.  Jim Finley, executive director of the Connecticut Conference of Municipalities, said Thursday he was "shocked" the bill died after repeated assurances from legislative leaders that the tax would be extended.

"Unless this inaction is reversed in special session, towns and cities will have to cut back services further and consider additional employee layoffs," Finley warned.

"I found that out at about 12:30 (a.m. Thursday) and I couldn't believe it," said House Minority Leader Lawrence F. Cafero Jr., R-Norwalk. "We made sure in the House that we got that bill out prior to doing the budget, so it could get time to go up to the Senate. They forgot to do the conveyance."

Senate Majority Leader Martin M. Looney, D-New Haven, said the reason why it didn't get put on a list of dozens of bills for unanimous consent in the waning hours of the 2010 legislative season was because there had been amendments attached by senators that could have resulted in major debates on the last day of the 23-week session.

"There wasn't an agreement on it until very late," Looney told reporters. "I'm sure we'll find a way to do it relatively soon."

"Certainly there is wide-spread support in the House," said Speaker of the House Christopher G. Donovan, D-Meriden, "There's support for the conveyance bill in the Senate, both sides of the aisle. We'll get it done."

"We have a veto session," said Senate President Pro Tempore Donald E. Williams Jr., D-Brooklyn. "We could call ourselves into special session any time."

The veto session will most likely occur during the third week in June, in time to head off the expiration of the tax on July 1.  Under state law, the scheduling of the annual veto session, in which lawmakers may gather to challenge the governor, depends on when the last bill of the year is delivered to the governor and the expiration of the 15 days upon which she has to act on it.

"I told the majority party last night that I would support it," Rell told reporters Thursday. "They said they had a bill they were putting it on. Obviously they didn't get it done, but the towns are looking for that."

Conveyance taxes, sales on property worth $2,000 or more, include a state portion and a local piece for sellers to pay.  The state gets 0.5 percent or 1 percent, depending on whether the piece is residential or commercial. The local part is 0.25 percent, but, since legislative action in 2005, it's up to 0.5 percent for 17 communities, including Bridgeport and Norwalk.
Senate votes to cancel projects slated for future borrowing...final story of session here.

Keith M. Phaneuf
April 30, 2010

The Senate voted unanimously Friday to tighten the limit on state government's credit card as lawmakers adopted a bill to cancel or reduce planned borrowing for dozens of community and regional projects in their home districts.

The measure, which now heads to the House of Representatives, also reduces bond authorizations for tourism programs, open space preservation and park improvements, energy efficiency projects, renovations to prisons and other state buildings and a host of economic development programs.

"We are all compelled to advocate for projects in our districts and we shouldn't apologize for that," said Sen. Donald J. DeFronzo, D-New Britain, who as co-chairman of the legislature's bonding subpanel, tackled the unpopular task of asking his colleagues to cancel many projects they already had touted back home. "But over time they accumulate."

The reductions and cancellations would bring state government nearly $180 million under its borrowing limit for the new fiscal year, which begins July 1, said DeFronzo, who cut funds for projects tied to his community's Polish American Foundation and YWCA.

The bill was developed in response to sluggish state tax revenues which only recently have begun to rebound for the first time in two years. The statutory debt limit, which covers both borrowed funds and bonding given preliminary approval, shrinks when tax revenues decline.

All bonding given preliminary approval by the legislature also must be endorsed by the State Bond Commission, a 10-member panel chaired by Gov. M. Jodi Rell and comprised of other administration officials and constitutional officers as well as leaders of the legislature's Finance, Revenue and Bonding Committee.

Connecticut's reputation on Wall Street and its ability to finance capital projects at low interest rates both were put at risk last fall. Two major bond rating agencies,  Moody's and Standard & Poor's, assigned a "negative outlook" to state government late last year, a move generally perceived as a warning before a bond rating is lowered.

The rating agencies also complained about the large amounts of revenue from one-time sources - such as the budget reserve and emergency federal stimulus grants - being used to support ongoing programs.

With more than $19 billion in outstanding bonded debt, Connecticut ranked second in the nation in debt per capita last year, according to the legislature's nonpartisan Office of Fiscal Analysis.

To help Connecticut's three largest cities deal with a 15 percent reduction in bonding for their local projects, the bill places the remaining $58.6 million into undefined funding pools and allows municipal leaders in Bridgeport, Hartford and New Haven to distribute the resources among projects in their respective communities.

Legislators wouldn't be the only ones forfeiting initiatives commonly referred to as "earmarks" or "pork-barrel" projects. The bill also eliminates $13 million from the Urban Act Program, which provides the governor with significant discretion to award state resources for economic development projects in large communities.

Jeffrey Beckham, spokesman for the governor's budget agency, the Office of Policy and Management, said Friday that the administration proposed a major reduction in planned bonding back in February and still supports that concept. Beckham added that the administration is still analyzing the bill adopted in the Senate and declined further comment.

Republicans, who are in the minority in both chambers, urged their Senate Democratic colleagues to be as open to cutting spending as they try to balance the 2010-11 state budget as they were in forfeiting bond funds for local projects.

"Let's not forget what we're facing as we move forward," said Sen. Andrew W. Roraback, R-Goshen. "The move that we've made here is substantial, it's significant and it's important. But there's more to do."

The preliminary $18.93 billion budget adopted last September for 2010-11 has been projected to be $726 million in deficit by the legislature's nonpartisan Office of Fiscal Analysis since early February. A new forecast, based on new signs of revenue growth, is expected to reduce but not eliminate that shortfall. That report is likely to be completed by Monday, legislators said.

State's cities, towns may get breather on paying off insurance cooperative's deficit
By Ted Mann Day Staff Writer
Article published Apr 22, 2010

Hartford - The state Senate voted Wednesday to give municipalities more time to resuscitate a failing insurance purchasing cooperative, pushing back a statutory deadline that would have required the towns to begin paying off the agency's $10 million deficit.

The Municipal Interlocal Risk Management Agency (MIRMA) was formed in 2002 by the towns of Chaplin and Willington to provide an alternative risk management pool through which towns and other public entities could buy workers' comp and other insurance.

But MIRMA has racked up deficits in every year since its formation and now teeters so close to insolvency that a recent report by an external auditor questioned how long the agency would continue to exist.
"These conditions raise substantial doubt about MIRMA's ability to continue as a growing concern," auditors for Saslow Lufkin & Buggy, LLP, wrote last year.

And while MIRMA has carried multimillion-dollar deficits in recent years, it was facing a major deadline on July 1. On that date, pursuant to earlier action by the legislature, MIRMA would have to begin complying with state statutes that require such organizations to maintain threshold contingency funds to cover their losses.

The price of closing that $10 million hole would have fallen squarely on the 65 towns and other MIRMA members that have learned only recently that the agency planned to recoup its liabilities by levying new surcharges into the hundreds of thousands of dollars.

But on Wednesday, the state Senate stepped in, voting 33-0 for a measure that postpones by six years the date when MIRMA must bring itself into compliance with the contingency fund requirements. The House of Representatives had earlier passed the bill by a vote of 145-2. The bill awaits action by Gov. M. Jodi Rell.

MIRMA's board of directors voted in August to assess its members' additional fees to cover the cumulative losses of its workers' compensation pool, which, according to its most recent audit, total more than $10 million.

Sponsors of the bill, including Rep. Marilyn Giuliano, R-Old Saybrook, and Sen. Joseph Crisco, D-Woodbridge, said it would enable the member towns in MIRMA more time to come up with the surcharges they could face from those charges.

"It simply extends out a repayment schedule" for towns, Giuliano said. "This just decompresses everyone's financial realities. We're going to need as many venues as possible to do that over the next year and 2011."
Rep. Stephen Fontana, D-North Haven, the co-chairman of the Insurance Committee, which raised the bill, said its designers envisioned the extension for MIRMA as a "guard rail" - keeping the organization from plunging into the abyss, but also a temporary aid on which the legislature would not let MIRMA permanently rely.

That argument carried the day in the legislature, but there were isolated notes of disagreement, including from Rep. Craig Miner, R-Litchfield. Miner supported the 2005 bill that first gave MIRMA a five-year reprieve from the capital requirements of Connecticut's insurance statutes, but wouldn't do so again this year, since he saw little change in the organization's approach.

MIRMA was launched as a competitor to the existing Connecticut Interlocal Risk Management Agency, at a time when fully private insurers were not often serving the municipal market, Miner said, noting that MIRMA's primary approach had been to try to beat CIRMA, its primary competition, on price.

"If they still just undercut the others to keep the business, there's no reason to think they'd do anything differently," Miner said. "If they're attempting to be super-competitive, they're never going to put any money in that contingency fund."

And, he added, "I just think sometimes a deadline's a deadline."

The state Department of Insurance takes a similar view of the legislation. The department opposed the bill, saying that MIRMA realistically had until June 30, 2011 - the end of the next fiscal year - to work out a fix, and that it believed the plan to have municipalities pay to close the deficit and assemble a sufficient contingency fund was appropriate.

"This bill is an illustration of the dangers of legislative carve-outs," Commissioner Thomas Sullivan said in a statement provided by a spokeswoman. "When companies are permitted to operate with less money than they need, the taxpayers in those towns could be asked to pay more money in taxes to keep the company afloat."

Representatives from MIRMA did not respond to a message seeking comment for this article.

Democrats scrap session on state deficit
DAY
Susan Haigh, Associated Press
Published: 11:06 a.m., Saturday, March 27, 2010

Democratic leaders of the Connecticut House of Representatives decided Saturday to cancel a planned vote on a proposal to address the state's budget deficit after Gov. M. Jodi Rell vowed to veto the legislation.

A spokesman for the House Speaker Chris Donovan told The Associated Press that House members were Saturday morning that the unusual weekend session had been scrapped.

The decision came hours after an early morning vote by the Senate to pass the deficit-reduction plan, but without enough votes to override Rell's threatened veto. The plan passed on a 21-15 vote, with three Democrats -- Sens. Gayle Slossberg, of Milford; Jonathan Harris, of West Hartford, and Joan Hartley, of Waterbury, joining the Republicans. Twenty-four votes are needed for a veto-proof majority.

The lack of a veto-proof majority in the Senate complicates Democrats' efforts to find a way to cover the current fiscal year deficit of approximately $500 million on their own terms. Rell, a Republican, has proposed her own cuts, but Democratic leaders have complained that they are draconian, would trim social service and health care programs severely and would hurt the elderly and poor.

Connecticut is in the midst of a two-year, $37.6 billion budget. Besides the current $500 million hole, the new fiscal year that begins July 1 is about $700 million in deficit, and 2011 could be as much as $3.2 billion in the red.

Rell vowed to veto the Democrats' bill Friday night, before the debate began.

The governor, who is in Colorado visiting family, issued a statement that called the proposal "woefully short on real spending cuts and burdensomely high on tax increases."

Senate Democrats fired back, bringing out the governor's unpopular deficit-cutting plan for a vote, pointing out its flaws and then defeating it.

They later debated the Democratic plan, which would close a psychiatric facility in Middletown for children and teens, eliminate about 20 deputy commissioner positions, merge state economic development agencies, impose two furlough days for nonunion employees, roll back an estate tax cut and impose a hospital tax that's similar to one included in Rell's proposal.

"This plan has cuts, tough choices and consolidations," Senate President Donald Williams, D-Brooklyn, said shortly after the 5:20 a.m. vote. "The Senate did its job and I look forward to final passage of the bill later today in the House -- then putting it on the governor's desk for her signature."

Minority Republicans in the House accused Democrats of trying to push through their deficit-cutting plan at the last minute to score political points.

"This is a partisan budget, not even with the pretense of being bipartisan," said House Minority Leader Lawrence Cafero Jr., R-Norwalk, on Friday. Cafero complained that the GOP has been calling on Democrats since October to address the deficit.

"The silence has been deafening," he said.

Senate Republicans offered up a GOP alternative during the early Saturday debate. Their plan, which was defeated, included monthly furlough days for nonunion employees, a 10 percent salary reduction for all elected officials and commissioners and numerous mergers of boards and commissions.

Legislative panel passes Democratic state budget
By SUSAN HAIGH, Associated Press Writer
Article published Mar 26, 2010

Hartford - Connecticut's Democratic-controlled budget-writing committee on Thursday approved a plan that spends more than $373 million beyond the governor's proposal but promises to generate more revenue to cover the cost.

The proposed adjustments to the second year of the state's current, two-year, $37.6 billion budget also included a surprise proposal to eliminate 390 positions at the Department of Correction, most of them correctional officers.

Under the corrections proposal, 4,000 nonviolent offenders with mostly drug convictions would be sent to alternative incarceration programs instead of prison to save $22 million.

The $19.3 billion, one-year budget plan was sent to the House of Representatives following a close, bipartisan 29-25 vote. Some opponents predicted the budget proposal - the Democrats' answer to Republican Gov. M. Jodi Rell's $18.9 billion plan - stood little chance of passage.

"We shouldn't support this budget because it's not real. And more important, it's not going to go anywhere," said Rep. Craig Miner, R-Litchfield, the ranking GOP House member on the Appropriations Committee. "It's not going to see the light of day."

Connecticut, which has been hit hard by the recession, is in the middle of a two-year, $37.6 billion budget that's estimated to be as much as $1.2 billion in deficit. This plan did not address the current fiscal year deficit, however, which has been estimated to be as much as $500 million in the red.

Senate Democrats are considering a vote Friday on another plan to address the current deficit but haven't yet reached an agreement with House Democrats.
Besides spending $373 million more than Rell's latest budget proposal for 2010-11, the plan approved on Thursday spends $346 million more than what lawmakers approved six months ago.

Sen. Dan Debicella, R-Shelton, the committee's Republican Senate leader, said spending more money "defies common sense" given the state's deficit problems. But Democrats said they were spending more, in some cases, to trigger additional federal revenue.

"It is in fact common sense," said Sen. Toni Harp, D-New Haven, the committee's co-chairwoman. "In an era when we don't want to raise taxes on the average Connecticut citizen, it finds a way for us to enhance revenue through the federal government."

The Democrats' budget proposal includes a complicated plan to trigger a higher Medicaid reimbursement rate for hospitals - 61 percent instead of 50 percent - from the federal government. They said the additional federal revenues, combined with a new tax on hospital gross receipts, pushes their budget $66 million below the governor's plan.

The plan also pays for some programs, such as school-based health centers, by shifting them from the state's main general fund to special funds where banks, utilities and other industries are charged fees to cover the state's regulation costs.

Rell's budget director, Robert Genuario, said those expenses will undoubtedly be passed on to consumers as a "hidden tax."

Paid Sick Days Bill Passes in Labor Committee
CTPOST
March 9, 2010 at 4:13 pm by Jonathan Kantrowitz

Today, the Labor Committee of the Connecticut General Assembly approved a measure to create a basic workplace standard for paid sick days.

The bill (SB 63) would allow workers at business with more than 50 employees to earn paid sick time – up to 5 days per year, and explicitly protects flexibility for employers who already have paid leave policies. A similar bill passed in the House of Representatives last year, but wasn’t called for a vote in the Senate.

“I’m thankful for the members of the Labor Committee today for understanding how hard it is to give the students I drive the service and safety they deserve when I’m at work sick.” said Wanda Cobbs, a school bus driver who drives West Hartford students to school, who testified at last week’s public hearing that she worked for a week last fall while infected with H1N1.

“Every day people with communicable illnesses to work sick because they can’t afford not to. They cook and prepare our food, take care of our children in day care centers and handle our purchases at the grocery store,” said Dr. Phil Brewer, University Medical Director for Student Health at Quinnipiac University. “As we saw during the H1N1 outbreak, when people lack paid sick days, the public is exposed to the unnecessary spread of illness.”

“I always advise employers to implement paid sick days policies,” said Scott MacDonald, a Human Resources consultant from Middletown. “My work with employers in various sectors has led me to the conclusion that paid sick days policies have real benefits for employers. There’s no data to support the idea that paid sick days negatively impact businesses or job growth. Rather, the positive impact on employee productivity, morale and retention more than outweigh the small cost of paying for a few sick days.”

One Democratic member of the committee, Rep. Ernie Hewett, voted against the bill, despite pleas of support from many constituents who wrote personal letters urging him to support the measure.

“At Wal-Mart, we go to work sick because we’re afraid we’re going to lose our jobs. We shouldn’t be penalized for being sick,” said one constituent, a Wal-Mart worker from New London wrote a letter to Rep. Hewett.

“I disagree that if I am sick with swine flu, strep or pneumonia or a serious condition that I get fired. I know for a fact, this happens all the time, cause it happened to me.” Said another constituent, who lost her job when she had to go to the emergency room and missed work – even though she brought a doctor’s note.

A new study published by the Institute for Women’s Policy Research (IWPR) drew a connection between the lack of paid sick days and the spread of H1N1, the so-called “swine flu” virus. (Related testimony here.)

The report, “Sick at Work: Infected Employees in the Workplace During the H1N1 Pandemic” made the following findings:

• An estimated 8 million American employees came to work while infected with H1N1.
• An estimated 7 million people contracted the illness from a sick co-worker.
• Workers without paid sick days were far more likely to come to work while infected with H1N1.

An estimated 600,000 workers in Connecticut lack paid sick days. Some of the largest groups of workers without paid sick days include workers in food service, retail and healthcare. 78% of workers in food services and accommodations lack paid sick days. When those workers come to work sick, they risk spreading illness to their coworkers and to the general public.

'An absolute time bomb'
CT MIRROR
Keith M. Phaneuf
March 4, 2010

After being rebuffed during her late November attempt to cut town aid, Gov. M. Jodi Rell steered clear of that public relations minefield in February, proposing no reductions to major grants in her budget plan for the coming fiscal year.

But less than four weeks later, despite virtually no change in an already dismal deficit forecast, the governor reversed herself, suggesting that towns take a $45 million hit starting July 1.

Why the back-and-forth?

Perhaps it's for the same reason legislators from both parties are pledging at the Capitol to keep their hands off town aid while warning constituents back home to brace for a dramatic hit very soon.  Municipal grants are too politically-sensitive to cut, but too big to leave alone. And the monster deficit looming over state finances 16 months from now is almost one-and-a-half times the size of all town aid combined.

Trying to fix the deficit without squeezing local dollars, officials say, can't be done.

"I've been telling the truth. We're going to face some real pain here," Sen. Tony Guglielmo, R-Stafford, said, summarizing the message he's delivered in recent visits to the 13 communities he represents in Tolland and Windham counties. "What we're looking at is unprecedented so you've got to assume everything is on the table."

That "unprecedented" obstacle Guglielmo is watching, according to the legislature's nonpartisan Office of Fiscal Analysis, is a $3.9 billion deficit built into the 2011-12 budget, the first spending plan that Connecticut's next governor and legislature must craft.

To put that deficit forecast into perspective, it equals 21 percent of the entire state budget for this fiscal year, 60 percent of annual state income tax receipts, and 144 percent of this year's $2.7 billion municipal grant package.

"Zero promises, that's what I'm making," in the district, House Minority Leader Lawrence F. Cafero, R-Norwalk said, adding he still believes state government shouldn't cut town aid in 2010-11, which has its own built-in deficit of $726 million, according to OFA. The preliminary budget for the next year kept grant levels flat and communities are counting on them.

But after that, what should towns expect? "I'd say I can't give them any expectations," Cafero added.

Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, also predicted any effort to renege on  municipal aid already in the budget for this year and next could force local tax hikes, and therefore has no chance at the Capitol, especially with legislators heading to re-election this fall. "That's not budgeting, that's dreaming," he said.

As far as what happens after that, though, "I can't tell you right now," he said. "I can't guarantee anything."

Towns have given state officials good reason to be wary of proposing any grant reductions.

Within days of Rell's Nov. 24 deficit-mitigation plan for the current fiscal year, which included an $84 million mid-year cut in town aid, the Connecticut Conference of Municipalities launched a radio ad campaign proclaiming the governor's proposal would drive up local property taxes statewide.

The administration was talking tough when that cut first was proposed. Rell's budget director, Office of Policy and Management Secretary Robert L. Genuario, said towns had to start bearing their share of the state deficit burden. "There cannot be any more sacred cows," he said at that time.

But a panel largely comprised of town leaders and formed at Rell's direction to find a way to slice $84 million out of the grant package balked at the task, and recommended it be disbanded after two meetings.

"I'm not going to put my head out and say, 'Chop it off,'" East Hartford Mayor Melody Currey, who served on the panel, said at the group's final meeting on Dec. 9. Shortly thereafter legislators offered an alternative deficit-mitigation plan, without touching town aid.

And by the time Rell proposed her revised, $18.91 billion budget for the 2010-11 fiscal year on Feb. 3, she only nicked municipal aid, taking $12 million largely from a school transportation grant.

Genuario abruptly summed up the administration's revised position at his initial budget presentation: "Nobody likes to cut town aid."

But as bad as the state's deficit forecasts are, the red ink really hasn't shifted since early February.

OFA's shortfall projections of $3.9 billion for 2011-12 and $726 million for 2010-11 are exactly the same. State Comptroller Nancy Wyman, who develops the principle budget assessment for the current year, expanded her deficit forecast marginally from $515 million to $518.4 million.

But when Rell came back with her next deficit-mitigation plan this past Monday, she suggested a $45 million cut to town grants.

While Rell talked this week about making tough choices that are necessary, if neither pleasant nor politically popular, one of the people campaigning for her job, former Stamford Mayor Dannel P. Malloy, said the writing is on the wall and town leaders know how to read.

"It is an absolute time bomb," Malloy said, adding Rell and others can try to forget about it, but it keeps coming back. "This is going to hit communities between the eyes."

Malloy said that during recent stops in several towns he has been asked what will happen to the aid that is one of two major revenue sources for communities, alongside local property taxes. "I tell people we're not going to do damage to the people most reliant on government, but then everything else is on the table," he added. "In our discussions with local communities I don't make hard and fast promises."

Even the chief lobbying municipal agency, the Connecticut Conference of Municipalities, is warning its members that the grants they count on amount are viewed as low-hanging fiscal fruit by many revenue-starved state officials.

The single-largest municipal grant, the $1.88 billion Education Cost Sharing program, is being propped up this fiscal year and next by $271 million in annual emergency federal stimulus aid. Once the stimulus aid expires in 2011-12, state officials have to either reduce the grant, or order what would amount to the largest increase in state funding for ECS in the program's history.

"We know that's not going to happen," CCM Executive Director James Finley said. "We're going over a cliff."

Campaign finance reform not exactly on hold; State legislators weigh legal strategies while awaiting federal ruling
By Ted Mann, Day Staff Writer
Article published Feb 23, 2010

Hartford - As the fate of Connecticut's historic campaign finance reform law hangs in the balance in federal court, state lawmakers Monday dived back into the debate over how to revise the law to address legal challenges.

In a public hearing of the Government Administration and Elections Committee, legislators weighed proposals:
• To lower thresholds by which minor parties qualify to receive grants for campaigns.
• To reduce overall grant amounts to address concerns that they constitute "windfalls."
• To repeal a provision that could trigger the all-but-certain dissolution of the five-year-old law in the event of a negative ruling by the 2nd Circuit U.S. Court of Appeals.

"The eyes of election law practitioners and policy makers around the country and in Washington, D.C., are watching what happens in Connecticut," said Rep. James F. Spallone, D-Essex, the co-chairman of the committee, "because we have the strongest, most comprehensive public financing law ever passed in this country, and it's very important that we respond appropriately to the challenge that we're facing."

Lawmakers are considering the uncertain future of the Citizens Election Program, which uses unclaimed financial receipts to fund election grants for legislative and statewide office-seekers who agree to limits on campaign spending and fundraising.

The program was struck down as unconstitutional last summer by a federal judge. Both that ruling, and another that upheld the state's bans on campaign contributions by lobbyists, state contractors and their families, are before the appeals court.

Lawmakers are trying to address some of the flaws identified by Judge Stefan Underhill, even as the ultimate resolution of the federal appeal remains an uncertainty.

"Rather than fluttering in the wind ... we want to be prepared to address any ruling that the Second Circuit may hand down," said Sen. Gayle Slossberg, D-Milford, the co-chairwoman of the committee.

The public hearing served to reopen old wounds from 2005, when Gov. M. Jodi Rell reversed the policy of her predecessor, former Gov. John G. Rowland, and embraced the concept of publicly financed campaigns and strict exclusions on contributions from lobbyists and contractors.

After numerous attempts to strike a compromise on a reform package in the regular legislative session in 2005, the law was finally passed in a special session later that year.
But the law has had a mixed reception in the courts.

Underhill upheld the state prohibitions on contributions by lobbyists and contractors in a suit brought by members of those industries and their spouses. But last August he struck down the Citizens Election Program in a strongly worded decision that questioned the amounts of campaign grants and suggested that the steps required of minor political parties to qualify for the ballot and for public funds represented an infringement on their constitutional rights and an unacceptable benefit to incumbents and to the Democratic and Republican parties.
The two suits were heard jointly by the appeals court, which also agreed to stay Underhill's ruling pending the outcome of that appeal.

Since Underhill's ruling, backers of the bill, including Beth A. Rotman, the director of public campaign financing for the State Elections Enforcement Commission, have urged swift legislative action to preserve the program.

In particular, Rotman urged quick action on a provision of the law that could gut the entire program upon an injunction by the court. That provision would kick in if the legislature was not able to amend the law within seven days of an injunction.

"By repealing that provision, the legislature eliminates the most imminent threat to the program's survival," Rotman said.

Opponents of public financing used the forum as a chance to revive doubts about the underlying premise of the 2005 reforms in general and public financing in particular, which Connecticut Republican Party Chairman Chris Healy called a "taxpayer-subsidized fraud."

Incumbents generally begin reelection campaigns near the 50-yard line, Healy said, but the tilt of the existing system toward the interests of incumbents puts them "near the goal line."

Healy's testimony elicited a testy response from Spallone, who got the Republican chairman to concede that the public system's grants don't actually come from taxes - the fund is supported by escheats, or revenue from unclaimed property that has reverted to control of the state treasurer.

Spallone also wanted to know about the Republican candidates who used the public financing system in its debut election cycle in 2008: "Would you say that those members of your party were participating in a taxpayer-subsidized fraud?" he asked.

"I think they were playing under the rules they were given," Healy replied.

Healy's fellow Republicans on the committee were unanimous in their skepticism of the proposed solutions to the potential constitutional flaws in the public financing program, a program they have repeatedly attempted to eliminate in recent months, in order to apply the revenue to balancing the state budget.

On Monday, they had an unlikely ally in a staunch Democrat: Sen. Edith Prague of Columbia, who said she supported the goals of the campaign finance system but not in times of spiraling state deficits.

"This is not the time, in my opinion, for us to spend $43 million of taxpayers' money on politicians' campaigns," Prague said, and asked lawmakers to temporarily suspend the program.
Proposed revisions of the existing campaign finance law submitted by Rell (HB 5021) and drafted by the committee (HB 5022) are available at www.cga.ct.gov.

No bonding right now
DAY editorial
Article published Feb 18, 2010

Connecticut has no business borrowing more money.

Already on the hook for $1.3 billion that the governor and lawmakers have agreed to securitize to balance the state's current deficit-riddled spending plan through June 2011, it defies common sense to further engorge that indebtedness.

If you haven't got money, don't spend it.

Connecticut doesn't have it, and that is justification enough for Gov. M. Jodi Rell to strike hundreds of projects valued at $389 million from a list awaiting action from the State Bond Commission.

Some funding was promised years ago, some recently. Some of the projects have been partly financed and others haven't gotten a penny. Lawmakers in hometown districts can argue  passionately for every cause, but in all honesty these projects are the state's version of what is commonly called "pork" in Congress.

And Connecticut can't afford the bacon right now. The state is wrestling with a current-year $500 million deficit that could swell to more than $3 billion by fiscal year 2012.

So while $3 million for development of supportive housing for families with medically complex children is needed and an admirable project to fund, it's an expense the state can't afford right now. Likewise for the $300,000 in grants-in-aid to American Red Cross chapters across the state for purchase of vehicles, trailers and telecommunications and computer equipment. The Red Cross is always there at an emergency, but the state can't be there to help right now.

With the exception of three new authorizations, Gov. Rell is wiping the bond-authorization slate clean. If the money isn't already in hand, it's not coming. And that's the only way chopping promised bonding largesse is going to be fair. If the governor or lawmakers start meddling and pull some projects but not others, no one is going to be satisfied.

Further borrowing is going to deepen the state's already steep financial hole, while forgoing bonding until better times will help improve the state's credit rating. All that approved but unallocated bond money has been dragging down the state's credit score.

One of the new authorizations - $100 million to establish a state loan-guarantee fund intended to stimulate $400 million in new lending by community banks - is a smart idea. Small and medium-sized businesses that have been struggling to access credit will get the help they need.

But another $21 million for the state Department of Information Technology to build a new data center should only be funded if it is demonstrated to save money, avoid duplication and make bureaucracy more accessible.

Gov. Rell's bond strategy is the right thing to do in hard times.


Dems want bonus surcharge, but is it legal?
CT POST
By Brian Lockhart, Staff Writer
Published: 09:48 p.m., Monday, February 15, 2010

A few days before the start of the 2010 legislative session, Derek Slap, spokesman for state Senate Democrats, circulated to the caucus a $20 million proposal to assist small businesses that would be funded by a two-year surcharge on certain executive bonuses.

Slap wrote in the accompanying e-mail that Senate President Donald Williams, D-Brooklyn, and Majority Leader Martin Looney, D-New Haven, "feel it is important to begin session week with some specific proposals to jump-start job growth."

But two weeks after Williams and Looney announced their jobs agenda, it is uncertain whether they have the legal authority to impose the bonus surcharge, how it would work or even if Democrats have enough votes to pass it.

Hoping to tap into outrage over the latest round of bonuses paid to Connecticut residents employed by banks and insurers that received federal bailouts, Williams and Looney during a Feb. 1 press conference said they wanted to place a 2.47 percent surcharge on bonuses of $1 million or more.

They would apply the surcharge retroactively to bonuses awarded this winter and next year, using the as yet unspecified revenues for a small business loan fund.

But some key votes, like Sen. Andrew McDonald, D-Stamford, have questioned the legality of the move.

"I'm very much in favor of creating a revolving loan fund," McDonald said. "I think the notion of a surcharge presents some unique legal issues that are not yet resolved."

Sen. Eileen Daily, D-Westbrook, co-chairman of the Finance, Revenue and Bonding Committee, said Monday "we're quite sure that we can" impose the surcharge.

But a Freedom of Information request submitted by Hearst Connecticut Newspapers to Senate Democrats did not yield any formal legal documents from staff attorneys authorizing Senate leaders to move forward.

"There's no kind of formal opinion," Slap said. But he said the matter has been thoroughly researched and discussed by counsel.

Based on the documents obtained through FOI, Senate Democrats' staff began discussing the surcharge in earnest on Jan. 27, sharing news reports and blog items about similar debates in Congress and in England and France.

One e-mail refers to a "final outline" for a bonus surcharge proposal that was floated during Connecticut's 2009 legislative session.

Staff also reviewed a 17-page report titled "Retroactive Taxation of Executive Bonuses" issued in March 2009 by the Congressional Research Service.

It appeared the 2010 effort was in jeopardy when, on Jan. 28, Senate Democrats' legal counsel reviewed an item from The Plum Line political blog. The blog reported that Laurence Tribe, a constitutional law professor at Harvard University and one-time adviser to Barack Obama's presidential campaign, viewed a similar effort in Congress as an illegal "attempt to punish an identifiable set of individuals who are the subject of understandable outrage."

"That's a show-stopper," Joel Rudikoff, an attorney for Williams and Looney, wrote in an e-mail. "What a buzz kill."

But just a few minutes later another state Senate Democrat attorney, Natalie Wagner, referred Rudikoff to another post on The Plum Line quoting a contrary opinion from Yale constitutional professor Jack Balkin.

"While Harvard may be concerned, a Yale law professor seems to think it's okay," she wrote.

Asked to comment on why Senate Democrats chose to side with Balkin, Daily said there "could be 200 (opinions) back and forth.

"There hasn't been a final decision made on implementation," Daily said. "We'll be having public hearings. We'll get more information that way."

In a January 29 e-mail, Wagner wrote that if the question of constitutionality is raised at the Feb. 1 press conference, "a response ... should generally be that this issue has been researched by constitutional scholars, congressional researchers and our staff over the last year and we believe that the proposal we are putting forward meets the Constitutional parameters suggested by those efforts."

Sen. Bob Duff, D-Norwalk, co-chairman of the Legislature's Banks Committee, has other concerns. Duff on Jan. 31 e-mailed Slap wondering how lawmakers would identify bonus recipients for the surcharge.

"As far as I know, bonuses are categorized under 'wages and tips' on a W-2 form. It is treated as ordinary income," Duff wrote.

Duff said he has not received an answer.

Christopher Uzpen, a tax and estate-planning attorney in Greenwich for Withers Worldwide, said the Legislature may be able to impose an additional withholding requirement on firms with executives living in Connecticut.

"Administratively, while difficult, that's probably how I guess they would do it," Uzpen said. "They impose the withholding obligation on the employer."

Asked if he thought the idea passed constitutional muster, Uzpen said: "My gut reaction is any time you're choosing to go after a particular group it's a little bit questionable. ... This is, I'd guess, just political grandstanding on behalf of the Democrats."

Rudikoff identified "an interesting complication" in a Feb. 2 e-mail, noting Bank of America "announced they're going to spread bonuses earned last year over three years, and pay in some cases 95 percent of them in stock and not cash."

Despite state Republican leaders in the General Assembly expressing outrage last year over bonus payments, some GOP lawmakers said they oppose the surcharge.

"Rather than getting serious about cutting out-of-control government spending, the Democrats are trying to be demagogues by attacking Fairfield County residents," said state Sen. Dan Debicella, R-Shelton, who is challenging freshman U.S. Rep. Jim Himes, D-Conn. "Raising taxes on financial services professionals will just cause them to move out of state, hurting the middle class who will have to make up the lost taxes." But Daily argues even with the surcharge, Connecticut's tax rates will remain competitive with those of neighboring states.

"There was concern that it would make some people set up shop out of state, so this is being crafted to be not higher than any other state," Daily said.

State Sen. L. Scott Frantz, R-Greenwich, said bonuses are the wrong target.

"They should not be punishing those who are paying the bills for Connecticut residents, no matter how angry they are about the financial market meltdown," Frantz said. "I also think it shows a certain amount of a lack of understanding of how this problem was created. There's a lot of blame to be passed around."

Senate Democrats will need to win over their counterparts in the House of Representatives.

Rep. Christopher Perone, D-Norwalk, a Finance Committee vice-chairman who is also helping draft a job creation proposal for his caucus, said, "Even if the surcharge is legal -- I have some qualms about it -- I just think it would be a hard sell down in Fairfield County."

Republican Gov. M. Jodi Rell's office would not comment on the surcharge proposal, but Senate Democrats would likely not have the numbers to override a veto.

All 24 Democrats would have to vote for an override, and Sen. Gayle Slossberg, D-Milford, said while backing aid for small businesses she is against the surcharge.

"To single out particular people for additional taxes based on where they work doesn't necessarily make a lot of sense," Slossberg said. "Everyone is struggling."

Borrowing needed to balance state budget; State to 'securitize' debt against future revenues
By Ted Mann, DAY Staff Writer
Feb. 5, 2010

Hartford - Gov. M. Jodi Rell's advisers began their effort to sell state legislators on the Republican governor's $18.9 billion plan for fiscal 2011 Thursday.

In the process, they also began the debate on one detail Rell didn't mention at all in the budget address she gave a day earlier: the $1.3 billion the legislature will have to borrow against the state's future revenues to make this budget balance.

Appearing before the legislature's Appropriations Committee, Robert L. Genuario, the governor's budget chief, faced skeptical questioning from some legislators about the options the administration offered to "securitize" those future revenues.

The securitization plan was a part of the two-year budget agreement passed by Democrats last fall that Rell allowed to become law, and required Genuario and his staff at the Office of Policy and Management to work with state Treasurer Denise Nappier to come up with potential financing schemes that would allow the state to borrow the money to avoid cutting more services or raising taxes in the coming fiscal year.

Rell didn't mention the plan in her address, and no details about it were provided in briefings Wednesday for reporters or legislators. But a copy of the report provided Thursday to legislators shows policymakers leaning toward issuing bonds backed by revenue from an existing state surcharge on electricity bills, or possibly from new revenue that would come from expanded offerings of the Connecticut Lottery, including keno.

By redirecting money from the existing surcharge on utility bills, the authors of the OPM/Treasurer's report write, the legislature would avoid imposing any new increase on utility ratepayers' bills - and would also avoid siphoning off money from the general fund.

Also considered in the agency's report to lawmakers were other sources of revenue, all of which were described as less stable, damaging to the state's already imperiled credit rating, or too costly to finance.

They include borrowing against future payments from the settlement of the multi-state suit against tobacco companies; establishing new taxes, fees or highway tolls; securitizing revenues that now flow into the general fund, including those from the state's Indian casinos; or avoiding securitization entirely by selling $1.3 billion worth of state assets, a major undertaking that the report says could probably not be achieved before the end of the 2011 budget year.

Borrowing against general fund revenues in particular would hurt the state by damaging its credit rating, the report says.

"The rating agencies, in general, do not look favorably on the use of debt to finance current operating deficits, and we attempted to take all possible steps to minimize any further deterioration in the State's credit rating," the authors write.

During the Appropriations meeting, Sen. Andrew Maynard, D-Stonington, wanted to know the advantage to "going this route as opposed to relatively more straightforward revenue measures."
Maynard and other lawmakers said they saw a disconnect between Rell's speech, which included proposals to spur "green" job growth, and the cuts in funding for energy efficiency programs that are now funded out of the existing surcharges on utility bills - which would be diverted for up to 10 years to pay off the $1.3 billion the state will borrow.

The move would be "effectively gutting" those clean energy programs, even as some private companies have shaped businesses and hired workers based on their incentives.

"There's no way to get the $1.3 billion of funding called for in the adopted budget without diverting revenue from some program or another," Genuario said. "You've got to pay for the $1.3 billion."
"Nobody," Genuario added later, "should have voted for that (budget) and promoted that without thinking there were almost predictable consequences for that."

The results of securitization "may be negative on programs that have been helping to create jobs," said Maynard, one of the Democrats who opposed the budget on its passage last year. He went on to criticize the "veiled and conflicting assertions" about the state's commitment to green job growth.

"If we are planning on pulling the rug out from under them, we should let people know that," he said.

"It's probably worse to say we are offering green jobs and then take away programs that are actually working," said Rep. Elizabeth Esty, D-Cheshire.

But the report to lawmakers leans heavily toward using the utility surcharge, as the legislature did in 2004 to close a deficit. The structure of the financing is "tried and true," Genuario said, and the tax-exempt bonds it would generate would be among the cheapest for the state to finance.

That is no consolation to advocates who have watched the governor and legislators twice raid funds supposedly earmarked for investments in improving efficiency just to bring an unruly state budget into balance.

The report "really does put a very big thumb on the scale in favor of raiding the energy funds," said Chris Phelps of Environment Connecticut, a nonprofit advocating for conservation and environmental protection.

Rell: State's financial quagmire can no longer be ignored
By Ted Mann Day Staff Writer
Article published Feb 4, 2010

Hartford - In the final budget address of her tenure, Gov. M. Jodi Rell Wednesday proposed sending the state down a path toward structural overhaul and government reform.  But those reforms, if they happen, will be authored by people other than the governor or state legislators and wouldn't be presented to lawmakers for a vote until after the Rell administration is gone.

The governor's proposal to create a "Government for the Twenty-First Century Commission" was tucked about midway through her address to the legislature on Wednesday, in which she presented a package of budget adjustments that trimmed just $28 million in overall spending from the state's current adopted budget while calling for a variety of proposals to spur small business development and job growth.

"Let me be clear about this: I intend to do everything in my power in my remaining months in office to make the changes that are needed to break insatiable spending habits and to make state government affordable once again," Rell said in her final State of the State address. "It would not be fair to my successor - or yours - to simply ignore the fiscal problems that we have today and that we all know lie just ahead."

But while avoiding proposing tax or fee hikes or major cuts to municipal aid, Rell also avoided proposing any major changes in the scope or practice of state government at this time, changes of the sort that have been elusive to the governor and the Democratic legislative leaders as they have faced down a current-year deficit of roughly $500 million, and deficits projected to top $3 billion or more by the end of fiscal 2011.

Instead, she cut and consolidated some commissions, reduced spending on jobs and social service programs, and depended heavily on federal aid and $1.3 billion in new borrowing to keep the state's budget in balance through June 2011, the end of the fiscal year.

Rell and her advisers said she designed her reform panel along the lines of the BRAC commission, the federally mandated group that evaluates Pentagon military base-closing recommendations and issues its own final recommendations to Congress, which can either accept or reject them but make no amendments.

Rell's panel would have a similar structure: Twenty-four members appointed by the governor, legislative leaders and the chief justice of the state Supreme Court would study all "structure and delivery systems of state government, including overlapping missions of state agencies, mergers, overhead, and efficiency of state government."

The panel would report findings to another review board by September 1 of this year, and that overseeing board would hold a public hearing. After preparing a draft of the recommendations it approved, the review board would submit those provisions in the form of proposed legislation in December.

Within 45 days of convening next year, the legislature would have to vote the entire reform package into law or reject it, without amendment.

"They will need the recommendations to grapple with the great fiscal challenges we will face," Rell told lawmakers. "We owe it to them - and to those who pay for our government - our taxpayers - and those who are served by our government. Let the creation of this commission be one of the first bills you act upon so that its work can begin immediately."

The governor's approach drew mixed reviews from legislators, including some who said they supported Rell's goals but wanted the governor and lawmakers to pursue more immediate reforms, and sooner.

"She's looking to balance this year's budget, and looking to set the stage for next year for significant reforms, but I think we need to do as much as we can for this year by July 1," said Rep. Cameron Staples, D-New Haven, the co-chairman of the Finance Committee, which controls tax policy in the legislature.

The governor's budget appropriates $18.9 billion across all budget accounts in fiscal 2011, just 0.1 percent below the initial level adopted last fall, and 0.6 percent higher than the spending plan approved for fiscal 2010, which ends this June. The budget is $485 million below the state spending cap, Rell's staff said.

Rell's major new initiatives include a proposal to borrow $100 million to help backstop a loan guarantee program aimed at helping community banks extend credit to small businesses, new student loan forgiveness for college graduates who remain in Connecticut after graduation, and a $10 million expansion of an existing tax credit program for businesses creating new jobs.
The governor would revive her proposal for adding new gambling - the bar and restaurant-based game Keno would be offered through the state lottery - but would also cut subsidies to her signature health care program, Charter Oak.

She would spend $1.6 million to extend weekday commuter rail service on Shore Line East to New London beginning later this month, and would boost funding for charter and magnet schools. But she would cut grants for manufacturing and machinery equipment tax exemptions - critical to industrial towns like Groton and Norwich - and slash $242 million in previously authorized bonding for local and state projects to make way for new spending.

After months of attempting to engage Democrats to prompt state spending cuts, Rell's own reductions in expenditures include traditional cost-shifting, like an agreement with state labor unions to defer $100 million in pension contributions, and leave the state heavily dependent on new federal stimulus aid that has yet to be received from Washington.

Rell's proposal attempts to inject responsibility into state budgeting, said Robert L. Genuario, the secretary of the Office of Policy and Management and her budget chief, in his briefing on the budget Wednesday morning.

Rell's budget adjustments would include, "no tax increases, no fee increases and continued maximization of federal revenue," including the Obama administration's Fiscal Stabilization aid and Race To The Top education funding, Genuario said. From the latter program, the administration has applied for $192 million in federal funds, half of which would go directly to struggling school districts.

Meanwhile, Rell has kept pace with rising social service demand, allocating roughly $234 million to keep pace with current services in the Departments of Social Services, Developmental Services, and Mental Health and Addiction Services.

"Charter Oak is something the governor is very, very proud of," Genuario said late in his budget briefing. "It's working. The fact that the governor's proposing suspending funding for subsidies in a program she cares so deeply about tells you how serious she is about controlling the deficit."

The Bank of Connecticut
By Rick Green, Hartford Courant
 on February 3, 2010 11:10 AM

Connecticut taxpayers will get deeper into the public banking business under Gov. Rell's new proposed budget. It's a good idea and I can't imagine how Democrats would oppose this, but how can Republicans argue for less government when their governor is going the other way?Rell's budget would:

    * bankloan2.jpgprovide $75 million in loan guarantees to banks so they can make more loans to small and medium-sized businesses. Rell's office says this could spur $400 million in loans;
    * set aside $25 million for direct loans of up to $500,000 to help small and medium-sized businesses;
    * forgive as much as $10,000 in loans for students who graduate from a Connecticut school with a degree in "green" technology, life sciences or "health-related information technology. The idea is to keep students from leaving. If we really want to do this, the forgiveness should be double or triple this amount.

School choice: 'The most efficient way' to desegregate
CT MIRROR
Robert A. Frahm
February 2, 2010

As Connecticut spends millions of dollars a year to meet a court desegregation order by building and running racially-integrated magnet schools, parents like Iraida Sanchez of Hartford would be happy with a far less expensive alternative.

Year after year, Sanchez has put her son Nathaniel's name in a lottery. She is not aiming for one of the region's state-of-the-art magnet schools but hoping instead for a desk in a regular elementary school in any of the city's neighboring suburbs.

No luck so far. "Ever since first grade or kindergarten he's always on the waiting list," she said. Nathaniel's now in fourth grade.

Despite what state officials insist is an ample supply of open seats under a decades-old school choice program, suburban schools have accepted only a trickle of children while Sanchez and thousands of other Hartford parents continue to wait.

Moving some of Hartford's largely minority student population to integrated or mostly white suburban schools was to have been a key element in the effort to comply with a 1996 state Supreme Court order [3] in the Sheff vs. O'Neill desegregation case. However, the state put its emphasis - and its money - mainly into building magnet schools with popular specialty themes such as science, performing arts and international studies. The suburban choice program languished.

But today, as magnet schools and the state's fiscal crisis push education budgets to the breaking point, some educators believe this civil rights-era program, now known as Open Choice, could be a more budget-friendly, long-term answer to school desegregation in the Hartford region.

"The future of Sheff rests on the back of Open Choice, not magnet schools," said Bruce Douglas, executive director of the Capitol Region Education Council (CREC), an agency that runs both the choice program and several magnet schools in the Hartford region.

Leaders of the state Department of Education and the legislature's Education Committee agree that the choice program should be expanded, and the potentially volatile issue of requiring suburban towns to accept city students may come up in the General Assembly session that starts Wednesday.

Urban-suburban transfer programs have been used to desegregate schools in cities such as Boston, St. Louis and Milwaukee, and plaintiffs in the Sheff lawsuit agree that Hartford's suburban choice program can play a larger role.

"We've always believed that [suburban] choice was a far more effective means to offer quality and integrated education for the bang for the buck," said John Brittain, a civil rights lawyer who was part of the team that filed the Sheff lawsuit in 1989...full story here.

State to defer $100 million in pension payments
CT MIRROR
Jacqueline Rabe [1]
January 28, 2010

State employee union officials said Thursday they have agreed to a plan by Gov. M. Jodi Rell’s administration to delay $100 million in contributions to their pension fund--a move that shrinks the budget deficit projected for this year, but adds to the state's $15.8 billion in long-term, unfunded pension obligations.

“It’s better than cutting spending,” said Dan Livingston, the  chief negotiator for State Employee’s Bargaining Agent Coalition. “We think a temporary increase in revenue would have been better though.”

The coalition's acquiescence was a formality: Rell had the right to reduce the payment under terms of an agreement reached last year with SEBAC on concessions to save the state $750 million over two years in return for a promise of no layoffs until July 2011.

That agreement included a provision allowing the state to defer up to $100 million in pension payments if revenue fell $300 million below expectations. The state now has a projected $513 million deficit [2] for the fiscal year that ends June 30.

“We have no choice but to discuss additional measures with them that might be able to help the situation,” said Jeffrey Beckham, legislative affairs undersecretary for Rell’s budget office.

Livingston said the decision to pay $600 million this year instead of $700 million to the pension fund will have no affect on state employees.

“It’s akin to an individual paying $1,500 a month on a mortgage and during tough times cutting that payment back to $1,400 a month,” he said.

Given the current budget problems [3] and Rell's history [4] of proposing spending cuts to close the budget gap, union leaders said defering the pension payment to protect programs made sense.

“Some programs are just too vital,” said Sal Luciano, executive director of Council 4 of the American Federation of State, County and Municipal Employees. But he added, "Clearly if you continue to underfund state pensions then you are talking about very serious fiscal issues for the state.”

In addition to the $15.8 billion in long-term, unfunded pension liabilities, the state faces a $24 billion liability for retirees' health care and $18 billion in bonded debt.

However, the delay in pension payments will help Rell and the legislature deal with the problem immediately before them. Rell is due to present her proposal for balancing the budget for this year and fiscal 2010-11 on Wednesday, when the legislature convenes.

How to get out of a traffic jam?  Try Light Rail???
Stuck in procedural traffic jam
DAY editorial
Paul Choiniere
Article published Jan 24, 2010

Certainly the state faces some major transportation challenges and its fiscal problems compound them, but one would think filling a vacancy on a board charged with developing transportation strategies would be manageable.

Think again.

The Connecticut Transportation Strategy Board (TSB) has members from the business community, state agencies and four so-called Transportation Investment Areas, assuring, in theory at least, representation from every quadrant of the state. The last appointee from the Southeast Corridor (that's us) was City of Groton Mayor Dennis Popp.

When Popp resigned from the commission, citing a heavy workload that did not provide him the necessary time to devote to the strategy board, the Southeastern Connecticut Council of Governments went about the task of recommending a replacement.

Last August, following the law governing the TSB, the council suggested three possible candidates - first selectmen Robert Congdon, Thomas Sparkman and Philip Anthony of Preston, Lisbon and Griswold, respectively. The COG even provided a little nudge, noting its preference was Congdon, the Preston selectman, "as he expressed the most interest in serving."

The job of picking one of the three rests with the co-chairmen of the legislature's Transportation Committee, currently Sen. Donald J. DeFronzo of New Britain and Rep. Antonio Guerrera of Rocky Hill. As of last week, there had still been no selection.

At Tuesday's meeting of the COG, local officials expressed exasperation that something as simple as making an appointment to the TSB was taking so long. COG Executive Director James Butler also voiced frustration in a Jan. 8 e-mail he sent to Bob Hammersely, TSB manager.

"We followed the prescribed statutory steps in nominating three candidates to represent our region and TIA corridor back in August," wrote Butler. "And I find it incomprehensible that an appointment has not been made or any communication been received back during the ensuing four and a half month period."

I gave a call to the co-chairmen and Rep. Guerrera promptly called me back. The chairmen, he said, saw no real rush to fill the vacancy because the Transportation Strategy Board hasn't been doing much of anything anyway. Unfortunately, no one bothered to explain this to local officials, who actually thought it might help to have someone on the TSB to push such issues as widening Interstate 95 or extending Route 11.

Indeed, until it met last week, the strategy board had not met since July, coming up with various reasons for cancelling its monthly meetings. It was also leaderless until the recent appointment of Bruce D. Alexander as chairman. He is a Yale University vice president and director of New Haven and state affairs for the university.

It's not as if this is an unimportant issue. Sixty percent of eastern Connecticut businesses responding to a recent survey said enhanced roads would help their businesses operate more effectively, while 28 percent pointed to a need for rail improvements.  But the state Department of Transportation issues a report this week that found the major projects needed in southeastern Connecticut - widening I-95, expanding the Mohegan-Pequot Bridge and extending Route 11, are "unfundable."

Guerrera said his committee might revisit the entire role of the Transportation Strategy Board. It seems to study issues and make recommendations, but there is not a lot if implementing going on, he said.  In 2003 TSB produced a comprehensive plan to upgrade and maintain the state's transportation system, from ports, to rail to highways, with a special tax on gas proposed to pay for it all. And two years ago it produced a study of how congestion pricing, which means implementing a toll rate that adjusts to highway traffic, could serve as a source of needed revenue to improve crowded highways.

Of course, it's up to the legislature to implement strategies, and that begins with Guerrera's committee, which couldn't even quickly fill a vacancy on the board.  So there is no money for local projects, the region has no TSB representation and the board's "strategy" is largely ignored anyway.  It doesn't fill one with confidence that Connecticut is going to solve its transportation problems anytime soon.



Despite Costs And Calls For Caution, Fatal Bus Crash Sparks Support For Seat Belts
Hartford Courant
By AMANDA FALCONE
January 22, 2010

Three out of four Connecticut residents support requiring seat belts on school buses, according to a Quinnipiac University poll released Thursday.

The poll surveyed nearly 1,600 registered voters less than two weeks after a Rocky Hill teenager died after a bus crash on I-84. It shows strong support for a seat belt law across party lines and in every area of the state, poll Director Douglas Schwartz said.

State lawmakers have proposed 23 seat belt bills over the past two decades, but it wasn't until the death of Vikas Parikh that the Quinnipiac polling institute, which started in 1999, asked residents about seat belts on buses. Although the legislative session does not begin until Feb. 3, state Rep. Antonio Guerrera, D-Rocky Hill, co-chairman of the legislature's transportation committee, has already proposed a bill requiring seat belts on school buses. Guerrera said that his bill lacks detail, but that he will decide how to proceed after hearing from experts. Lap-and-shoulder seat belts, also called three-point belts, are being considered, as opposed to lap belts, he added.

If that bill passes, Connecticut would become the seventh state to require seat belts on school buses. The state or local districts would pay to install the belts.

As Guerrera and other proponents push for a school bus seat belt requirement, Thursday's poll numbers can only help their cause.

"Obviously, when you have that kind of support, it makes legislation easier to pass," Guerrera said.

Seat belt bills submitted in previous years have failed to make it out of committee, but many people think the measure has a better chance this year because of the Jan. 9 bus crash that killed Parikh, 16, and injured other students from the Greater Hartford Academy of Mathematics and Science in Hartford.

Parikh is the first Connecticut school bus passenger to die as the result of an accident since the state began keeping track in 1972.

History Of Failure
Previous bills have been backed by a number of political heavyweights, including former Rep. James A. Amann, D-Milford, who later became House speaker and is now running for governor, and former state Rep. Christopher S. Murphy, who now represents the state's 5th Congressional District. Political clout, however, was not enough to propel the issue through the legislative process.

The last seat belt bill to get a public hearing was introduced in 2006 and was prompted by a high school student's essay. In that year, Guerrera and former Sen. Biagio Ciotto, a past deputy commissioner of the Department of Motor Vehicles, chaired the transportation committee.

Ciotto blamed the failure of earlier bills on the cost, and on reports by the National Highway Traffic Safety Administration that seat belts aren't needed on large school buses.

"It's a difficult situation," Ciotto said, urging lawmakers not to act on emotion and to carefully look at all sides of the issue.

Since Ciotto left the legislature, the traffic safety administration has acknowledged safety concerns on school buses. While it does not mandate seat belts, the agency requires all school buses manufactured after Oct. 21, 2011, to have 24-inch seat backs, rather than the current 20-inch backs. It also set standards for school districts that choose to install three-point belts in large school buses.

The NHTSA still refers to a 2002 study that says school buses have a fatality rate of 0.2 per 100 million vehicle miles traveled, compared with 1.5 fatalities per 100 million vehicle miles in cars.

Because of those statistics, groups like the Connecticut School Transportation Association have opposed bills that call for the seat belt mandate.

Buses rely on compartmentalization, meaning seats are placed close together and are flexible and cushy to absorb impact, said William D. Moore, the association's executive director.

The NHTSA "has been repeatedly asked to require belts on buses, has repeatedly reanalyzed the issue, and has repeatedly concluded that compartmentalization provides a high level of safety protection that obviates the safety need for the federal requirement necessitating the installation of seat belts," a 2008 agency report says.

But Sen. Thomas P. Gaffey, D- Meriden, co-chairman of the education committee, said seat belt bills have failed in part because of lobbying efforts. Bus organizations have made the issue confusing and have brought unrelated factors into the discussion, he said.

"The bill has been bogged down in the past because of bad information," said Gaffey, who supports installing seat belts on buses. "The safety of kids should be paramount in everyone's minds."

Moore said his association is not against making buses safer. If lawmakers mandate seat belts, his group would support three-point belts but not lap belts, which could cause injury if used improperly, he said. Local school leaders echo Moore's comments.

New Britain administrators have attended bus seminars and spoken with representatives from DATTCO, the district's bus contractor, but have not learned of an effective restraint for large buses, said Assistant Superintendent Ron Jakubowski. Large buses are used at different times by small children and by high school students, raising the question of whether seat belts could be adjusted for varying heights and who would make the adjustments, he said.

Until experts resolve those questions, New Britain children will continue to ride buses designed with the "egg carton" approach, Jakubowski said, referring to compartmentalization.

"We have fender benders from time to time," he said. "Very, very rarely does a kid get any kind of injury unless they're sitting improperly. ... or doing something they shouldn't be."

In Southington, as in many other districts, the seat belt debate has stalled over concerns such as the fear of injury from the belts themselves. Still, if experts unveiled a safe seat belt design, the district would likely outfit its buses with them, Southington Superintendent Joseph Erardi said.

"It would not be about money," he said. "I can just about assure this community that the board would find some way, somehow, to make sure that every bus had a seat belt."

Money

The NHTSA said in 2008 that installing three-point seat belts on all large school buses in the country would cost between $183 million and $252 million.

According to the trade publication School Transportation News, the cost of adding seat belts to a new 66- to 78-passenger school bus could be $1,500 to $2,000, plus $100 to $500 to repair or replace damaged belts. The publication gave a wide estimate of the cost — from $1,500 to $11,000 — to retrofit one older bus with structural reinforcement and seat belts.

The cost is not the reason groups like the Connecticut School Transportation Association have opposed seat belt bills, Moore said.

"That's so far from the truth, it's frightening," he said, adding that actual costs are largely unknown, but would be minimal over the lifetime of a bus.

Money, however, remains a sticking point for lawmakers, especially during tough economic times.

House Speaker Christopher G. Donovan, D-Meriden, is already saying the legislature needs to be mindful of the costs of seat belts.

State residents need to realize the costs, too, he said when commenting on the Quinnipiac poll.

Donovan said that while few would argue that putting seat belts on buses is not a good idea, the challenge for Connecticut is to figure out how it can require seat belts and be fiscally responsible.

Cost Vs. Benefit

Lawmakers ultimately must weigh the costs and benefits of seat belts, said Robin Leeds, president of the board of directors of the Pupil Transportation Safety Institute, a nonprofit group. The Groton resident is an independent consultant whose primary client is the National School Transportation Association.

Lawmakers also need to be careful when they write the bill, and should include a provision that would prevent school districts, bus companies and bus drivers from being sued if there are any injuries related to the seat belts, Leeds said.

Like many others, Leeds believes Vikas Parikh's death changes the conversation about seat belts in Connecticut.

She also said technology changes the equation. Lap belts have been the only option for buses in the past, but now there is the three-point belt, which was introduced in the early 2000s, she said.

As the legislative process moves forward, Leeds, much like Ciotto, urges caution. Fatal bus crashes are not common occurrences, she said, and the state needs to be careful when reacting to rare events.

•Staff writers Monica Polanco and Matthew Sturdevant contributed to this story.

Copyright © 2010, The Hartford Courant

RETIREMENT PLANS: Municipalities Tackling Pension Costs
The Hartford Courant
By BILL LEUKHARDT
January 2, 2010

WEST HARTFORD

A new retirement plan approved by the town's smallest union sets a precedent that local officials hope other unions can accept in an effort to trim spiraling pension costs.

"Future pension obligations are huge issues for West Hartford and other municipalities," Town Manager Ronald Van Winkle said. "The change in the ... contract with school security guards is a change we are making a priority in talks with other union members."

A pension system that pays retirees a guaranteed monthly amount puts pressure on a town, officials say, especially when a falling economy erodes investments that pay those pensions.  According to the Center for Retirement Research at Boston College, in December 2008, the nation's public pensions had total liabilities of $2.9 trillion and assets of $2 trillion, largely a result of stock markets' losses.  Plus, local obligations increase over time as workers retire at higher levels of pay. A decade ago, West Hartford's pending pension obligations were $13 million. Now, officials say, the figure is closer to $25 million.

It's a looming expense that West Hartford and other Connecticut municipalities are trying to retreat from, like deer running from an advancing forest fire.

The changes sought by local government echo changes that American businesses began making in the 1980s. In 2006, almost 80 percent of state and local workers nationwide aged 25 to 64 were covered by a pension, compared with only 45 percent in the private sector, according to data from Boston College.  And 80 percent of those public sector workers with retirement coverage had a defined benefit plan. In private industry, "more than 60 percent of [pension] participants [are in a] defined contribution plan," according to the Center for Retirement Research.

So far, 28 of the state's 169 municipalities have some version of less-expensive 401(k)-type plans for workers, instead of increasingly costly traditional pensions, according to information town Finance Director Chris Johnson said he got from the Connecticut Conference of Municipalities.

Avon was among the first, switching in 1997 from defined pension benefits to a defined contribution plan for all new hires. Currently, 25 percent of the town's workforce is on the old system, and 75 percent is in the new plan.

"Really, it's a generational change," said Bill Vernile, the town's director of human resources. "The town contribution in the new system is a third of the cost of the defined benefit. Our employees contribute 7.5 percent of their pay, and the town matches that. Our expenses are predictable."

Manchester has worked since 2000 to move its employees into defined contributions plans. Some unions have agreed, but not all. Alan Desmarais, the town's finance director, said municipalities statewide are trying to change retirement plans "so the town doesn't have to deal with pensions, and costs are lower and predictable."

The city of New Haven has nine open contracts this year and will "try to make the move into defined contribution plans," said Craig Manemeit, the city's director of labor relations. "We're looking to get out of the pension business and out of uncharted fiscal territory."

In West Hartford, the 15-member guard union's contract — up for a school board vote on Tuesday — bars any new guard hired from enrolling in the increasingly costly defined-benefit pension system.  Instead, new guards will be covered by a less-expensive 401(k)-type plan that could trim town liability by at least 60 percent, makes costs predictable and shifts the investment risk to employees. Guards already in the defined-benefit plan will stay in it.

Rick Ledwith, the town's director of employee services, said West Hartford will be asking other unions to amend retirement plans whenever a contract is up for negotiation. Ten are up this year, he said.

"The private sector reacted more quickly to this," Johnson, the finance director, said. "It takes longer to do in government. No one is clamoring on the door for this. We have to negotiate. But right now, the town is holding all the risk. We need to change that."

Copyright © 2010, The Hartford Courant

Connecticut Democrats pass two bills to cut deficit;  Lawmakers pass 2 bills in effort to balance state budget
CTPOST
By Ken Dixon, STAFF WRITER
Updated: 12/21/2009 10:22:35 PM EST

HARTFORD -- The Democratic-controlled House and Senate on Monday, amid Republican claims that they've been excluded from the budget-adjustment process, approved two bills that would erase about $200 million of the state's $337 million deficit.  It would be up to Republican Gov. M. Jodi Rell to cut the remaining $137 million from the first year of the two-year, $37.6 billion budget, they said.  During a special session of the General Assembly, Republicans said that while tax revenue continues to decline, Democrats are searching for ways to raise money when spending cuts should take precedence or the state's economy will worsen.

"There has to be a better way," said Senate Minority Leader John McKinney, R-Fairfield, asking for Democrats to join GOP lawmakers. He warned that the state's bond rating is in jeopardy.

"We have punted our responsibility," McKinney said, admitting frustration with the majority during the floor debate on the deficit mitigation plan.

"If you don't want to call us, if you don't want our ideas, if you don't like what we have to say and you don't want to invite us to the room, fine, but you better solve your problem then," McKinney said.

Rell, who was noncommittal on whether she might veto the legislation, was highly critical of Democrats.

"They simply cannot cut, and they apparently cannot be shamed, embarrassed or criticized into doing so," Rell said in a statement after the final House vote about 8:30 p.m.

"But they certainly can point fingers. It is always someone else's fault and somebody else's job to clean up the mess."

Democrats, led by Senate President Pro Tempore Donald E. Williams Jr., D-Brooklyn, said Rell has actually overspent in the executive branch agencies she runs by $212 million.  The deficit legislation passed the House 101-38, with five Democrats crossing over to join GOP lawmakers, including state Rep. Jim Shapiro, D-Stamford.

The bill passed 19-15 in the Senate, with four Democrats voting against the measure, including state Sens. Gayle S. Slossberg, D-Milford, and Bob Duff, D-Norwalk, signaling its vulnerability to a potential Rell veto.

"We are in dire fiscal straits," Slossberg said after the vote. "We can't afford to do business as usual. It's time for us to reduce spending. My vote today is a vote to change the way we do business."

"I don't think the cuts are deep enough and that we've all got to work together, sharpen our pencils, make deep spending cuts and balance the budget," Duff said after the vote.

Minority Republicans criticized Democrats for introducing legislation that would change the way Connecticut taxes estates and gifts.  Majority leaders responded that the state's grim budget necessitated delaying a law that would have exempted taxes on estates totaling $3.5 million, up from the current $2 million, starting Jan. 1.

The bill would push back the effective date two years, while raising $76.2 million in tax revenue to help with the current deficit. The measure passed the House 97-39, with 15 absent during the holiday week, after a nearly 50-minute debate.  State Rep. John W. Hetherington, R-New Canaan, said the legislation targets southwestern Connecticut.

"This is a particularly pernicious tax measure for those of us in Fairfield County," he said, adding that it will hit small-business owners and farmers, but not the insulated very wealthy.

State Rep. Terrie Wood, R-Darien, called for Democrats to vote against the bill.

"We shouldn't be borrowing from something and taxing the same people over and over again," Wood said.

House Minority Leader Lawrence F. Cafero, Jr. R-Norwalk, said the House majority is ignoring the economic reality of the state's sharply declining revenue and growing budget deficit.

"What's the first thing we do?" Cafero asked. "We don't have enough money, so we'll just raise taxes. That's what we're doing with this bill."

House Majority Leader Denise W. Merrill, D-Mansfield, said the budget deficit is a moving target.

"We're trying to protect jobs," she said. "We feel at this time it would be imprudent to have a tax cut like this."

Seven Democrats joined 32 Republicans in voting against the bill, including state Reps. Kim Fawcett, D-Fairfield; Joseph S. Mioli, D-Westport; and Margaret Reeves, D-Wilton.  State Rep. Thomas J. Drew, D-Fairfield, said he sided with Republicans because raising revenue shouldn't be an early option in solving this year's deficit.

"I don't think increasing the tax, in effect, ought to be our first response," Drew said in an interview on the floor after the vote. "There are more efficiencies we could produce. I'd rather do that first."

The estate-tax legislation passed the Senate 22-12.  State Sen. Andrew J. McDonald, D-Stamford, was the lone Democrat who voted against the estate-tax legislation. In an interview, he said it's too soon after the summer vote that restructured the estate tax for lawmakers to revise it.

"Changing tax policy in major ways on a monthly basis destabilizes the system and creates unpredictability, which can have very negative consequences for an economy," he said, noting that raising the so-called cliff, triggering the estate tax from $2 million to $3.5 million, was a way to get state policy in line with the federal government.

"That was part of an overall tax policy that was good for the state in August, and peeling it apart now was unjustifiable, in my opinion," McDonald said in an interview. He said he voted for the deficit mitigation legislation because it restored more than $425,000 to Stamford for school funding that Rell wanted to cut.
Legislature still at odds over strategy to trim deficit; Democrats' proposal seen as coming up far too short
By Ted Mann Day Staff Writer
Article published Dec 22, 2009

Hartford - As Connecticut's fiscal 2010 budget slides further into deficit, a divided state legislature voted Monday evening to trim state spending and delay a scheduled tax cut on wealthy estates.
But Republicans and some members of the Democratic majority ripped the legislative effort as far too small - a roughly $40 million mitigation bill that cuts some programs and shifts cash to close the shortfall, and a $76.2 million tax bill that postpones changes to the gift and estate tax.

In the current fiscal year, which ends June 30, legislative analysts project the budget to be nearly $400 million out of balance, but lawmakers disagree on how to close the gap.  And as the legislature acted, Gov. M. Jodi Rell announced that she would ask state employee unions to reopen negotiations in search of new concessions. But union officials said shortly afterward that they would not negotiate additional give-backs for state workers.

Democratic leaders called their bill a responsible step toward balance and renewed the charge that Rell is "overspending" the budget that she allowed to become law earlier this year. Senate President Donald E. Williams Jr., D-Brooklyn, pointed to more than $212 million in agency deficiencies in the current fiscal year, saying Rell is failing to stay on target to find more than $473 million in savings before June 30.

"The governor needs to live within the means of the biennial budget," Williams said.

The mitigation bill would address only the roughly $116 million shortfall in incoming tax revenue, Williams said, not "overspending" by state agencies.

But Williams' Republican counterpart, Senate Minority Leader John McKinney of Fairfield, declared that a "shameful argument" and said Democrats were trying to push the responsibility for making unpopular cuts onto the governor.  In declaring that Rell was overspending, critics were obscuring the fact that much of that spending consists of entitlement programs that cannot be easily cut - like rising Medicaid costs linked to the worsening economy - or areas in which legislators themselves would be unlikely to accept reductions.

"Go ahead," McKinney said. "Who's going to stand up and offer to cut the state police?"

The bill also highlighted strains within the large Democratic majority caucuses, particularly in the Senate, where a core of moderates has grown more uncomfortable with proposals to raise taxes and critical of the failure to make deeper spending cuts.

"I couldn't in good conscience vote for a package that didn't address the seriousness of the problem," said Sen. Andrew Maynard, D-Stonington, who voted against the deficit mitigation bill. But he added that he thought Senate leaders had been partially constrained by the firmer resistance to deep social-service cuts among the House leadership.

Sen. Andrew McDonald, D-Stamford, huddled in a private discussion before the session with Williams, Majority Leader Martin Looney, D-New Haven, and Sen. Jonathan Harris, D-West Hartford, and eventually voted for the mitigation package. But McDonald was the only Democrat in the Senate to buck the leadership on the vote to postpone the scheduled cut in the estate tax and raise its top rate, which he said reversed a commitment made in the budget last summer that was intended to offset the income-tax increases that the legislature passed on wealthy taxpayers.

"It was important to my constituents then, and it remains important today," McDonald said of the estate-tax change.

The mitigation bill passed the Senate, 19-15, with four Democrats opposed. The estate tax changes passed with stronger support, 22-12.
In the House, the measures passed on largely party-line votes.

In a written statement, Rell said she was "profoundly disappointed" in the legislature, dismissing the bill as a few spending cuts and "sleight-of-hand accounting."

"It is time they stop the rhetoric and the finger-pointing and take their responsibilities seriously as elected officials and make the tough decisions," Rell said. Her statement gave no indication as to whether she would veto either of the two bills passed on Monday.

Republicans did question some of the cuts recommended by Democrats, however, including multiple speakers in the House who objected to a $76,000 cut that would require the closure of one of two facilities in the state for the honorary Governor's Horse and Foot Guard.  But most of the debate centered on whether cuts went far enough.

Sen. Andrea Stillman, D-Waterford, who voted for both bills, said the legislature's package was not enough, but it was a start. And she countered Republican declarations that failure to make heavy cuts now would lead to more borrowing to erase the deficit later this year.

Not possible, Stillman said: "We're borrowed up to our eyeballs, and we can't borrow anymore."
Legislative Special Session Set For Monday
Hartford Courant
December 19, 2009

The state legislature will convene in special session Monday to consider making budget cuts, but several lawmakers said they were unclear exactly what they will be voting on.

The press secretaries for House Speaker Christopher Donovan and Senate President Pro Tem Donald Williams made the announcement about the session, which is being called after the legislature took no action Tuesday on Republican Gov. M. Jodi Rell's deficit-cutting plan. Lawmakers said at that time that they would be voting on their own plan before Christmas.

Sen. Jonathan Harris, a West Hartford Democrat, said he is among a group of senators who believe that the legislature should "come in sooner rather than later and actually make some real cuts." Lawmakers could be voting on $116 million in cuts, "but we haven't seen what they are yet," Harris said.

— Christopher Keating


Conn. Democrats call for $1 billion in bonding
CTPOST
By SUSAN HAIGH, Associated Press Writer
Updated: 12/18/2009 05:57:25 PM EST

HARTFORD, Conn. (AP) -- Legislative Democrats on Friday unveiled a plan to borrow $1 billion to pay for construction projects across Connecticut that they say will create more than 16,000 jobs.

The 12-month initiative calls for funding previously authorized transportation, housing, energy conservation, clean water and higher education capital improvement projects that can be started within 90 to 120 days.

The lawmakers claim additional bonding does not needs to be authorized. Rather, they said bond money should shifted from other projects that have not yet been started or create few jobs to those that can begin quickly and employ more people.

"If you want money coming into this state, put people to work," said Rep. Antonio Guerrera, D-Rocky Hill, co-chairman of the legislature's Transportation Committee.

Connecticut's unemployment rate is currently 8.2 percent. But unemployment in the construction trades was as high as 30 percent earlier this year, according to Ben Cozzi, president of the Connecticut State Building Trades Council. He said that figure could jump to as much as 40 percent in 2010 given the lack of work.

Republican Gov. M. Jodi Rell's office was unenthusiastic about the proposal, saying nearly $1.3 billion in bonding has been approved in recent months for large and small projects, including the new West Haven Rail Station and construction at Gateway and Norwalk Community Colleges.

"All of these efforts have one goal: putting people to work," according to a written statement from Rell's office.

Her office maintains that the governor will continue to use bonding as an economic development tool, but "will not do so irresponsibly and she will not do it for pork barrel projects."

Another $1 billion in unscheduled borrowing would cost taxpayers $400 million in interest payments, according to Rell's office. The state is currently about $200 million below its limit for borrowing before projects would need to be canceled.

Democratic legislators said they'd be willing to cancel some projects already approved for funding in order to make room for other projects that are ready to go, especially those in communities with high unemployment.

They also stressed that now is the perfect time to invest in state infrastructure improvements, especially with low interest rates for borrowing and the cost of some building materials dropping.

"Conditions are the most favorable that they've ever been for this type of investment," said Sen. Donald DeFronzo, D-New Britain, co-chairman of the Transportation Committee. ۩


Do you think one hand knows what the other is doing?  We hope so!
Nation's crumbling infrastructure a big concern for national security expert; Too little attention being paid to a 'critical' issue, Old Lyme man contends
By Jennifer Grogan Day Staff Writer
Article published Dec 19, 2009

As the new president of the Center for National Policy, national security expert Stephen Flynn wants to raise the profile of the issue he is most passionate about - the country's aging infrastructure.

"We are seeing evidence of America's crumbling infrastructure on almost a daily occurrence but we are not talking about it," said Flynn, who lives in Old Lyme. "When the bridge fell out from under the folks in Minneapolis, we fixed one bridge. I'm not sure that's the problem."

With federal stimulus money available for infrastructure improvements, Flynn said now is the time to pursue an investment strategy in environmentally sound infrastructure, which will create jobs, improve the country's competitive position and strengthen national security, thus turning a "crisis into an opportunity."

Scott Bates of Stonington is the vice president of the center, a nonpartisan national security think tank in Washington. Bates said he was "very happy to be part of a Connecticut team" that is going to "try to make a difference in Washington."

Bates shares Flynn's concerns about the decrepit state of the country's infrastructure.

"We have to build resilient systems, from cyber systems to transportation to health care, to make sure that if there is a natural disaster or terrorist attack we can bounce back quickly," Bates said. "We were not able to respond effectively to Hurricane Katrina. We were unprepared for 9/11 and it took a while to bounce back.

"We have to be more resilient and more prepared as a people. It's a mission I'm excited about, and Steve Flynn is the right person to lead that job."

Flynn has been thinking, writing and speaking about this topic for years. He is the author of "The Edge of Disaster: Rebuilding a Resilient Nation" and "America the Vulnerable." He served as the lead policy adviser on homeland security for the presidential transition team after President Barack Obama was elected.

Flynn said the Sept. 11, 2001, terror attacks made it clear to him that adversaries would confront U.S. power by targeting civil society and the critical infrastructure that underpins that society. So, he said, he began to try to think like a terrorist.

"The mantra at the time was, 'We need good intelligence,' " he said. "OK, good luck with that. So the only thing you can do, not knowing what the bad guys are up to, is to put yourself in the role of a bad guy. What would you hit?

"I started looking at infrastructure in a more systematic way, the levee systems, power grid, port facilities. I kept saying, 'Forget the bad guys, this stuff is falling apart in its own right.' "

The problem has worsened since then, Flynn said, because infrastructure is looked at as an unaffordable cost rather than as an investment.  Born in 1960, Flynn said he remembers when public works projects were a source of pride. His daughter, who is 14 years old, has seen towers fall, a city flooded and a bridge collapse.

"It's like we inherited the grandparents' mansion and we decided not to do any upkeep," he said. "Everyone is driving by what looks like a nice house on the outside, but the plumbing has gone to hell and the wiring is shot."

Flynn wants to incorporate expertise from other parts of the country, mainly New York, San Francisco and the Houston/Dallas area, into the policy process.

His priority is making the transportation and energy infrastructure less brittle and more resilient so it will be a less attractive target to terrorists.

"The Center for National Policy aims to be a thought leader on this critical issue and to identify not just that we should think about this, but how," Flynn said.

Flynn spent a decade as a senior fellow for national security studies at the Council on Foreign Relations. He starts at the center on Jan. 1 to replace Tim Roemer, the new U.S. ambassador to India. Flynn plans to commute to Washington rather than moving his family from Old Lyme.

"There's so much to be said for having the opportunity I've been afforded, to be in a research institution like the Council on Foreign Relations where you can shut out the world, think and write," Flynn said. "But increasingly I have more of a sense that there has been enough talking. We know what we need to do. It's time to get things moving."

j.grogan@theday.com

So how does this affect the State of CT budget?
Next step after tribe's default not yet certain; Legal ramifications in 'uncharted waters' after Mashantuckets fail to make $7.5 million interest payment
By Brian Hallenbeck Day Staff Writer
Article published Dec 17, 2009

It's not the kind of milestone that warrants a parade.

Without acknowledging it overtly, the Mashantucket Pequot Tribe officially defaulted Wednesday on a $21.25 million bond-interest payment that was due in full a month earlier. At the time, the tribe made a partial payment of about $14.2 million.

Wednesday marked the end of a 30-day grace period for the balance.

The tribe, owner of Foxwoods Resort Casino and MGM Grand at Foxwoods, forwarded an inquiry about the remaining $7 million due to Joele Frank of Wilkinson Brimmer Katcher, the New York firm it hired to handle communications related to its restructuring of more than $2 billion worth of debt.

"We refer you to the Nov. 16 statement," a spokesman there said. "Use that language. We're not going to go beyond that."

In that statement, the tribe announced that "the trustee for the tribe's $500 million 8.5 percent notes due 2015 has received and distributed approximately $14.2 million of the $21.25 million semi-annual interest payment due today … The tribe does not currently anticipate the remaining amounts due will be paid within the grace period, which will result in an event of default … on Dec. 16, 2009."

Despite its inevitability, the "event" was duly noted among those involved in tribal gaming and the financing of it.

"The actual date doesn't change anything; everybody's been anticipating it," said Kevin Quigley, an attorney with Hamilton, Quigley & Twait, a St. Paul, Minn., law firm that works with tribal governments and casino operators. "We've been monitoring the (Mashantuckets') debt-restructuring. The fact that it's such a large amount and the fact that it's one of the leading casinos in the country - in the world, really - makes it significant."

The Mashantuckets' default, the latest and largest of several involving tribal casinos, "drives home the point that we're going to be working out this issue over the next 12 to 18 months as the economy works itself out," Quigley said. "We're in uncharted waters."

It's still too early to tell how the Mashantuckets' financial situation is likely to play out, Quigley said. Most experts believe a bankruptcy filing is out of the question, given sovereign tribes' status as governmental units, he said, but no federal court has yet been asked to rule on the matter.

"It all depends on three things - the patience of lenders, the ability of the Pequots to earn their way out of it and the overall economic recovery permitting both sides some breathing space," he said.

Quigley said he was aware of a case in which a financially troubled tribe and its creditors discussed forming a new casino management team, though he declined to identify the tribe. Any plan calling for outsiders to assume management of a tribal casino would be subject to the approval of the National Indian Gaming Commission, as would any change in a tribe's gaming-revenue allocation plan, he noted.

It remains unclear whether the Mashantuckets' creditors would eventually seek to limit the distribution of gaming revenue to the tribe, which relies on the income to finance its government and to provide payments to tribal members.

In late October, the tribe entered into a so-called forbearance agreement with the banks that hold a $700 million line of credit that's due in July. The agreement allows the parties to continue negotiating terms of the loan through Jan. 20. Other deadlines related to the terms of various classes of senior bonds are approaching.

Those who hold the 8.5 percent bonds affected by Wednesday's default do not expect the tribe to seek a forbearance agreement with bondholders, a source who spoke on condition of anonymity said this week.

"We do expect to receive a restructuring proposal," the source said, adding that legal action is an option if the tribe offers terms that are considered too "draconian."

b.hallenbeck@theday.com


Democrats to foil special session order
By Ken Dixon, CTPOST STAFF WRITER
Posted: 12/15/2009 07:18:29 AM EST
Updated: 12/15/2009 07:18:44 AM EST

HARTFORD -- Majority Democrats will satisfy Gov. M. Jodi Rell's order to meet in special session Tuesday, but they will immediately gavel it to an end.

Instead, they'll meet again, possibly next week, to come up with about $100 million in program cuts toward the $340 million deficit Rell wants to erase before the end of the calendar year.

They said Rell can get another $100 million in concessions from state unions because the massive falloff in sales and income taxes allows her to reopen negotiations with the nearly 50,000 unionized employees.

Democrats would also delay changes approved earlier this year to the tax on the estates of deceased persons, in order to generate another $40 million a year.

Speaker of the House Christopher G. Donovan, talking with reporters after a four-hour, closed door caucus Monday, said Democrats believe Rell's proposed deficit-mitigation plan would threaten cities and eliminate 4,000 to 6,000 jobs at a time when the state's economy depends on them.

"We will not cut our cities and towns by $84 million," Donovan said of Rell's proposed 3 percent cut to town aid in the two-year, $37.6-billion budget that started July 1. "We're not going to sacrifice 5,000 jobs. This recovery is about creating jobs."

Majority Senate Democrats on Monday night had not reviewed the House proposals.

A spokesman for Rell warned that Democrats, who run the House 114-37 and the Senate 24-12, are showing "an incredible and disheartening disregard" for the state's fiscal problems, which center on a sharp drop-off in sales- and income-tax revenue. The spokesman questioned the accuracy of the Democrats' claimed loss of jobs.

Donovan, D-Meriden, and House Majority Leader Denise W. Merrill, D-Mansfield, said Rell's budget proposal would lose about $39 million in federal funding at a time when she's ignoring hundreds of millions of dollars in federal sources for anti-poverty programs and high-speed rail projects.

Earlier in the day, supporters and providers of children's programs, including school-based health centers, early childhood education, and the Connecticut Alliance of Boys & Girls Clubs Inc., warned that Rell's plan to cut their budgets by $47 million would mean fewer jobs and more kids growing up with health problems and in danger of becoming high school dropouts.

Rich Harris, a spokesman for Rell, said the administration is in the process of seeking more federal funding.

"The claim of 5,000 job losses is a made-up number from so-called leaders who are unwilling and unable to address the realities of this fiscal crisis," Harris said.

"The bottom line is the majority party is showing an incredible and irresponsible disregard for the red ink that's mounting daily," said Harris, criticizing nonprofit groups including Connecticut Voices for Children, which supports raising the 6 percent sales tax to 7 percent to create $600 million in new revenue.

"That's $600 million dollars out of the wallets of families all across the state in the middle of the worst economic times since the Great Depression, and at the same time, they're offering no alternatives to reduce state spending," Harris said in an interview. "What planet are they living on? The question is: What are they going to do to make state government affordable?"

Joe Andreana, executive director of the Boys & Girls Club alliance, said during a morning news conference in the Legislative Office Building that the 16-member organization, which operates at 50 different program sites serving about 60,000 youths age 6 to 18, has been able over the last four years to leverage $4 million in state contributions to receive $4 million from out-of-state sources.

"If, in fact, the $1.1 million appropriation grant that was approved in our most current budget was to be removed, as the governor is proposing, that would represent something in the neighborhood of 5 to 15 percent of the total budget of our Boys & Girls Club," he said. "It would mean that 4,800 at-risk youths would remain on our streets, tempted by all of the illegal temptations that our teenagers are faced with."

Jessica Saguer, executive director of the nonprofit All Our Kin, said Rell's cuts would attack the state's next generation of kids, at a time when she offered United Technologies $100 million in tax breaks to save about 700 jobs.

"The question to Gov. Rell is: what makes the employees of Pratt & Whitney and Sikorsky more important than the parents and teachers of the lower and moderate income families whose jobs are at stake here?" said Saguer. "Investing in children today saves money tomorrow."

Democrats in the House and Senate remain divided on how best to rewrite the state's landmark campaign-reform legislation of 2005, so no action on that is expected Tuesday.

State Sen. Gayle S. Slossberg, D-Milford, co-chairwoman of the legislative Government Administration & Elections Committee, said Monday that she and House colleagues need more time to work out a rewrite of the law that created the state's public-financing system for General Assembly races and statewide campaigns, including governor and attorney general.

"There is no agreement at this time," Slossberg said in an afternoon phone interview. "We're both continuing to work on possible solutions. There are a lot of options out there on how to design that system, and I'm still discussing with my colleagues."

Earlier this year, a federal judge threw out the law, stressing that it creates unfair obstacles for minor parties and petitioning candidates. The state is appealing the ruling.

Republicans have counteroffer for Rell budget; GOP lawmakers would restore aid to cities and towns, trim sales tax
By Ted Mann Day, DAY Staff Writer
Article published Dec 5, 2009

Hartford - Legislative Republicans proposed an alternative to Gov. M. Jodi Rell's deficit-cutting package Friday, restoring aid for towns and cities while slashing other state spending to close the current-year deficit.

In a press conference at the Legislative Office Building, Senate Minority Leader John McKinney, R-Fairfield, and House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, emphasized their differences with Democrats over spending priorities and proposed cuts to safety-net programs.

But some of the starkest contrasts are between the Republican legislators' plan and that offered last week by Republican Gov. M. Jodi Rell. The lawmakers proposed reversing Rell's call for a cut of $84 million in municipal aid payments, calling that an "extremely detrimental and disastrous" move that would inevitably lead to local property tax increases.

And Cafero and McKinney also called for a cut of 0.5 percent in the state sales tax, a feature of the budget that had been canceled since state revenues continued to fall below projections. Proceeding with the tax cut, despite falling receipts, would channel roughly $130 million back into the state's economy, the lawmakers said.

Even as they proposed restoring the tax cut, the Republicans would call to proceed with all of Rell's proposed unilateral cuts to social-service programs and other accounts. In a question-and-answer session, Cafero said proceeding with potentially painful cuts to some social programs while cutting taxes was part of the "balancing" act for legislators.

Merchants who pay a portion of the sales tax "are desperate for some form of relief," Cafero said. "In some cases, a mere matter of $1,000 means the difference between keeping a person employed or laying them off."

"This plan simply recognizes the truism of our recession," McKinney said. "Government cannot spend more than we have. We've been doing it for too long, and it's time we stopped."

But it immediately put the minority caucus at odds with both Democratic leaders and Rell, who warned in a statement that some of the education funding cuts Cafero and McKinney proposed would "result in us losing more than a half billion dollars in stimulus funds."

"Their $36 million cut in higher education would cost us $541 million in stimulus," Rell said, adding that other proposed reductions could trigger further cuts in aid to cities, towns and nonprofits.
Republicans also proposed an across-the-board cut of 6.5 percent in most state spending accounts, which they projected would save $258.3 million. And they proposed eliminating entirely the remaining $30 million in the Citizens Election Fund, which provides grants to candidates in Connecticut's public financing system for state political campaigns.

The latter proposal brought a quick rebuke from reform advocacy groups like the Connecticut Citizen Action Group, which said that would be akin to "gutting one of the best anti-corruption tools that exists."

"I do appreciate the Republicans' work on addressing our shortfall," Rell said. "I look forward to working with them and the majority Democrats on December 15th in bringing all solutions together to solve our common problem."

But while Rell has called lawmakers into special session on Dec. 15 to address the current $466 million shortfall, it is still unclear what action, if any, the legislature will take that day. The bulk of Rell's cuts can be undertaken unilaterally, without legislative action, and some in the Democratic majority have suggested they would wait until the beginning of the new year, when lawmakers will be preparing budget adjustments for 2011.

t.mann@theday.com

State lawmakers propose ways to save state money
Stamford ADVOCATE
By Ken Dixon, STAFF WRITER
Posted: 12/01/2009 05:40:33 AM EST
Updated: 12/01/2009 05:40:55 AM EST

HARTFORD -- A panel of lawmakers and state officials Monday recommended consolidating data centers, overhauling the state Department of Motor Vehicles and streamlining licensing procedures to save taxpayers millions of dollars.

The Commission on Enhancing Agency Outcomes was presented with 33 draft recommendations, including cooperative purchases of goods and services; consolidating printing centers; and joining other states in contracting for pharmaceuticals and other common purchases.

More than $100 million in savings were identified in the preliminary areas of focus for the commission, which held its first meeting since last spring.

"We want to work smarter, more efficient, help people step up to a better life and not be an obstacle to prosperity," said state Sen. Gayle S. Slossberg, D-Milford, co-chairwoman of the commission.

"We know that state revenues continue to decline, our income-tax receipts are weak," she said. "We still have businesses closing in our communities, and we're still struggling."

Sharing purchasing with other states could save $10 million a year; agency consolidation could save $8 million a year; and providing community services for nonviolent inmates could save $17 million a year, according to preliminary research.

"The most important outcome that I believe we could have is to have a state where people can get a decent job," Slossberg said. "So supporting businesses, economic development, helping people with job skills, retraining and education are all areas that are important and we should be focusing on."

Another proposal would save $10 million a year on privatizing medical services at state prisons.

She said the commission is not looking to take away jobs from state employees.

"The problem is not the people who work there but the system that's been created," she said. "We need to be accountable to the taxpayers so that we get the most value for our tax dollar."

The commission was formed during the 2009 regular session, and its goals were rewritten slightly during the September special session, when the group was ordered to look into the consolidation of state agencies and departments. It has until Feb. 1 to develop a preliminary report, and a final report is due by the end of 2010.

Slossberg said the 33 recommendations are only the start and that other ideas for focus will be readily accepted over the next couple of weeks.

Opened and closed in the same breath - so what's the real story here?
S P E C I A L    S E S S I O N    C O M I N G    D E C . 1 5
State legislature facing tough choices on spending cuts
CT POST
By Ken Dixon, STAFF WRITER
Posted: 11/29/2009 11:10:48 PM EST
Updated: 11/30/2009 07:58:46 AM EST

HARTFORD -- A mid-December special session of the General Assembly will be another harsh reminder of the state's fragile economy, as lawmakers -- in what is supposed to be a part-time Legislature -- will again confront Connecticut's seemingly continual budget deficit.

It will be the first attempt within the current budget to reach a compromise on a deficit-mitigation plan offered by Gov. M. Jodi Rell, a Republican who has been in various states of conflict with majority House and Senate Democrats for more than a year.  Rell says that Democrats continue to avoid the tough issues of necessary spending cuts. Majority leaders blame a nationwide economic downturn and point to the need to continue social spending programs when many state residents need help the most.

But with the state constitution requiring a balanced budget and revenue sources that were used to create the two-year $37.6-billion spending plan that took effect July 1 no longer available, Democrats may have to accept most of the nearly half-billion-dollars in cuts the governor proposed last week for the Dec. 15 special session.

Democrats will have support from local chief elected officials and social-service providers who are hoping to continue spending levels that they received in the budget that was supposed to have been settled in early June, but which kept lawmakers haggling in the Capitol until Oct. 2.

$467 million gap

Robert L. Genuario, a former state senator from Norwalk who is Rell's budget chief as secretary of the state Office of Policy and Management, said last week that the $467-million gap Rell has proposed closing could be the only shortfall that the General Assembly has to deal with in the budget that runs through June 30.  That would make it a lot easier for lawmakers who last year confronted four deficit-mitigation plans plus five rounds of budget cuts ordered by the governor under her unilateral powers, in the face of sharply falling income and sales-tax revenue.

"At the current stage of the economy, where things appear to be bottoming out, we are hopeful that this will be the only deficit-mitigation plan that will be necessary this year, if in fact it is adopted completely," Genuario told reporters last week in the Capitol. "But of course there are no guarantees about that. If revenues continue to decline there may be need for further action, but we're not predicting or projecting that at this time."

No sales tax cut

A scheduled cut in the state's 6 percent sales tax, down to 5.5 percent, that was included in the Democratic budget, will not occur because it was contingent on the revenue stream remaining steady. Instead, tax revenue has continued to fall past the 1 percent decline that will cancel the tax cut that would have taken effect Jan. 1.

The nearly $130 million in revenue saved by retaining the 6 percent sales tax, means that a deficit of about $337 million needs to be closed. Rell's proposed cuts take that into account and include a controversial 3 percent reduction in municipal aid, amounting to an $84-million cut from a base of $2.8 billion.

Rell called for the formation of a committee made up of municipal leaders -- two from large cities, two from mid-sized communities and two from small towns, to join legislative leaders to see where the least harm would be caused by the cuts. She also wants the leaders to see which state mandates can be eliminated at the local level -- such as costly in-school suspensions -- to offset the burden of that reduction.

Bridgeport Mayor Bill Finch, who will be on the small committee of elected officials and lawmakers reviewing potential cuts, said an additional 3 percent reduction on top of what has already been taken from the city's operating budget could have a "devastating" effect.

'lean and mean'

Shortly after reviewing Rell's proposal, Finch got on the phone to the offices of Speaker of the House Christopher G. Donovan, D-Meriden, and Senate President Pro tempore Donald E. Williams Jr., D-Brooklyn.

"I wanted to remind them that 50 percent of my budget is education that I can't touch," Finch said. "We've reduced our workforce, 10 of 11 unions have agreed to contracts with no pay increase; we've had 150 layoffs; we cut take-home cars by over 40 percent; we've had green initiatives; we're in court on every piece of property that owes back taxes. We're running as lean and mean as we possibly could and have very little flexibility."

Rell's proposal could mean another $2.5 million reduction for Bridgeport, he said.

Who's affected?

The Connecticut Conference of Municipalities, representing communities of all sizes throughout the state, last week called for a straight up rejection of Rell's $84-million cut, which would come on an earlier $50-million reduction in the current budget.

"Cutting more state aid in mid-year wouldn't be a savings," said Kevin T. Maloney, director of public and media relations for the New Haven-based CCM. "It would merely shift more of the state budget deficit onto local governments and local property taxpayers. Increasing the state's largest and most unfair tax -- the property tax -- by cutting municipal aid is bad public policy."

Other criticism is mounting from local community-based service providers and even dentists who are concerned about proposed funding reductions for elderly services.

"Governor Rell's proposed deficit-mitigation plan will have a devastating effect on Connecticut's providers of human services and the hundreds of thousands of vulnerable individuals who rely upon them for help," said Terry Edelstein, president and CEO of the Connecticut Community Providers Association, which works with those who have developmental disabilities, mental illness and substance use disorders.

"The system is already stretched dangerously thin with three years of flat funding coupled with decades of under funding and increasing operating costs," Edelstein said in a statement last week.

Matthew Barrett, executive vice president of the Connecticut Association of Health Care Facilities, said Rell's plan to cut by 2 percent the rates paid to fund nursing homes is draconian, especially since the current two-year budget reduces Medicaid expenditures by $300 million.

"This proposal from the governor is perhaps the harshest and most devastating ever seen in Connecticut, even more so because it comes on the heels of the deep cuts to Connecticut nursing home funding in the recently adopted two-year state budget, millions in Medicare cuts made earlier this year, and still further cuts proposed by Congress in the pending health care reform legislation," Barrett said in a statement.

The Connecticut State Dental Association last week joined the chorus lining up against Rell's proposals, warning that more than 208,000 adults and an unidentified number of children, could be denied dental services if lawmakers approve the governor's plan to eliminate Medicaid and SAGA state-assistance programs.

"While the CSDA fully understands the dire economic circumstances facing the state and understands the terrible task that the governor and Legislature face as they once again try to close the budget deficit, jeopardizing the health of hundreds of thousands of Connecticut's most needy and vulnerable residents is not the way to do it," said Dr. Bruce Tandy, President of the CSDA.

"Any short term savings will evaporate when the state is forced to pay dramatically higher health-care costs as those without coverage develop serious oral and general health issues and seek costly emergency room care; in fact, emergency room dental care is ten times greater than the cost of routine dental visits in a dentist's office."


Things shifting in CT state politics...Republican leadership in Legislature to stay the course;  Secretary of the State  to try for Att'y General spot on ticket and the big news, of course, is that Richard Blumenthal will step out of what the Courant, I think, has called his "comfort zone" to run for the nomination for Governor (now that Jodi Rell stepped aside).


REQUESTS OPINION FROM BLUMENTHAL TO ANSWER CRITICS
Bysiewicz Seeks Blumenthal's Opinion On Her Qualifications For AG Post
Hartford Courant
By JON LENDER
January 16, 2010

Secretary of the State Susan Bysiewicz has asked state Attorney General Richard Blumenthal to issue an opinion on whether she is legally qualified to serve as attorney general — the office for which Blumenthal is not seeking re-election as he pursues the U.S. Senate seat of Christopher Dodd, who is retiring.

Bysiewicz phoned Blumenthal on Friday afternoon to make the request in response to critics who Thursday questioned whether she meets the criterion in state law requiring Connecticut's attorney general to have "at least 10 years' active practice at the bar of this state." The questions arose the day after Bysiewicz's Wednesday declaration of her candidacy for the Democratic nomination for attorney general.

There is no specific legal definition of what constitutes "active practice."

But Bysiewicz said Friday that she had researched the question back to 1899. And, she said, it is so clear that she qualifies — having been an attorney since 1986, and practicing law both as a private attorney and government official since then — that she now wants a legal opinion from Blumenthal.

"I am so confident that this is the case, that, to put this to rest, I have asked Richard Blumenthal for an opinion," she said. She said she called her fellow Democrat on the phone and would write a letter to formally make the request.

Asked if Blumenthal agreed to issue an opinion, she said: "He was in the middle of something. He said he had to call me back." But she said, "I'm sure he will."

Blumenthal did not commit himself. He had his office issue a statement saying: "The Secretary of the State has contacted our office. We have received no formal request for an opinion. We cannot comment further."

Legal sources say that any opinion he issues will be just that — his opinion — and will not be legally binding. However, it would carry some weight politically.

The legal sources said that the only way to get a legally binding answer would be to file in Superior Court for a judge's declaratory ruling on the question, and that would involve a court hearing, or hearings, to consider evidence and arguments.

The questions raised Thursday about Bysiewicz's legal qualifications were aired Thursday in Internet blogs including The Courant's Capitol Watch.

On Friday, Bysiewicz had strong words for critics, including another potential attorney general candidate, Cameron Staples, a Democratic state representative from New Haven who said Bysiewicz has not engaged in the actual practice of law long enough even though she has been registered as an attorney for about 23 years.

"I think it is poor judgment, irresponsible and ludicrous to suggest that 'active practice' means only 'private practice' — and that strict interpretation would exclude past attorneys general ... and even our current attorney general, Dick Blumenthal," Bysiewicz said.

Explaining her logic in that reference to Blumenthal, she said the same reasoning that disqualifies her 11 years in government as secretary of the state would also disqualify Blumenthal's four years of government service as U.S. attorney for Connecticut, the top federal prosecutor's job in the state. Without counting those four years as government prosecutor, Blumenthal would not have had 10 years in private legal practice by the time he ran for election as attorney general in 1990, Bysiewicz reasoned.

"That test would exclude Richard Blumenthal. He was U.S. attorney from 1977 to 1982, and then from 1982 to 1990 he was in private practice in a law firm while he was in the General Assembly," she said. "So, if you take 'active practice' to equal 'private practice,' that would mean his public sector practice didn't count."

However, to serve as U.S. attorney, one needs to be an attorney and engage in the criminal law daily.

To serve as secretary of the state, one need not be a lawyer. But Bysiewicz said while it's not required, it helps to be a lawyer in her office, and she practices law "every day" in the role.

"If you look at my job description ... in the General Statutes, [it] requires that the secretary give legal opinions ... [and] advise local officials on election laws." Also, she said, "every day, I get a question going to the eligibility of someone to vote" or concerning legal issues facing businesses that must make filings with her office. "That's what I do for constituent service every day," she said.

Bysiewicz said she worked for a prominent New York and Washington firm from 1986 to 1988 in corporate and international law. Then, she said, from 1988 to 1992, she worked in corporate and banking law at the Hartford firm Robinson & Cole.

From 1992 to 1994, she said, she worked in the law department of Aetna Life & Casualty handling health care and pension matters. She also "served six years in the state legislature, where I sat on the judiciary committee, and where I also chaired the elections committee."

"So, I would supervise attorneys and help draft election laws, and debated them on the floor of the House. And then for the past 11 years, I've not only been administering a large agency with many lawyers and legal assistants, but I've also been advising people about how to comply with our election and corporations laws. And I believe that that experience is highly relevant and important. ... I believe that I have a strong background in private sector and public sector law, and would argue that I am very qualified," she said.

Bysiewicz talked of her legal research on the question of eligibility. "The statute is vague," she said. "It doesn't define what 'active' means." But, she added, "I don't believe the legislature would have excluded public-sector lawyers. If that were the case, then George Hinman, who was elected in 1915 to the attorney general's post where he served until 1919 ... wouldn't have qualified."

She said Hinman graduated from Yale Law School in 1899, and he held positions in the legislature, including House clerk and Senate clerk through 1915. "At no point between 1899 and 1915 was he ever engaged in private practice. He only went into private practice in 1921 after leaving the attorney general's position," she said.

Capitol Bureau Chief Christopher Keating contributed to this report.

Copyright © 2010, The Hartford Courant


McKinney Stays Put
ct news junkie
by Christine Stuart | Jan 12, 2010 3:25pm
(0) Comments | Log in to Post a Comment
Posted to: Election 2010, State Capitol


Senate Minority Leader John McKinney
Sen. Minority Leader John McKinney, R-Fairfield, who had been mentioned as a possible candidate for everything from governor to U.S. Congress announced Tuesday that he would not be seeking higher office.

“While I am grateful for the support and encouragement I have received over the past several months, I believe this decision, at this time, is best for me and my three young children,” McKinney said in an emailed statement Tuesday.

This summer McKinney had been talked about as a possible Republican challenger to U.S. Rep. Jim Himes. McKinney’s father, Stewart B. McKinney, once held that seat and it was believed McKinney would follow in his father’s footsteps.

However, McKinney announced in July that he would not be running for Congress. A few weeks later he filed for divorce against his wife.

“Our state faces extraordinary challenges – challenges I want to meet. That is why I will continue my commitment to the people of the 28th State Senate District, as well as my position as Senate Minority Leader; and I will seek reelection to the State Senate this year,” McKinney said.

“Please know that I am committed to building on my record as an effective State Senator, and I will continue to advocate for the fundamental restructuring of state government I believe is necessary to lead us out of this fiscal crisis and protect Connecticut’s long-term economic security,” McKinney said in his statement before thanking his supporters. “I know I am making the right decision by choosing a course that will allow me to serve the public in the State Senate, while being the father I want to be to Matthew, Graysen and Kate.”

Greenwich businessman Tom Foley, who is seeking the Republican nomination for governor, seemed to be breathing a sigh of relief at McKinney’s announcement. Foley’s campaign sent out the following statement:  “John McKinney is a gifted and experienced public servant who would have been a strong candidate for Governor. But I am glad that he has decided to run for re-election to the State Senate where Connecticut needs his leadership. I look forward to working with him this year to elect more Republicans to the General Assembly.”

Lt. Gov. Michael Fedele, the other candidate running for governor, also sent out the following statement:

“Senator McKinney has done a great job as Senate Republican Leader and he continues to be an effective and reasoned voice in the ongoing legislative debate over taxes and state spending.  He knows that Connecticut cannot continue to protect an unaffordable status quo as the Democrat majority has done for over a year.  He knows that now more than ever, we must demand that government be accountable and fiscally responsible.  Senator McKinney has been, and will continue to be, on the right side of these issues and he will continue to serve our state and its taxpayers very well.  I consider Senator McKinney a valuable partner and ally as we work together to lead Connecticut to economic recovery.”


SECRETARY OF THE STATE BYSIEWICZ LEADING THE PACK FOR DEMOCRATS...TOP ROW
According to polls, standing atop the declared candidates for CT Gubernatorial race 2010 (Democrats) is Sec'y Bysiewicz;  Republcan names so far, second row - Lt. Gov Fedele, Minority Leader of the House Cafero (not running, see article below) and former U.S. Attorney O'Connor.  And now, Ambassador Tom Foley.  And considering a run, possibly, First Selectman Mary Glassman (Dan Malloy's choice for Lt. Gov. in 2006, who actually ran with John DeStefano).


6th Democrat debating gubernatorial bid
By Mary E. O’Leary, New Haven Register Topics Editor
Tuesday, December 29, 2009

Another elected Democratic official is weighing whether to get into the fray for the party’s gubernatorial nomination.

Mary Glassman, first selectwoman of Simsbury and the party’s lieutenant governor candidate in 2006, appeared before the Hamden Democratic Town Committee last week, looking for feedback on a run for governor.

Contacted at her office Monday, Glassman said she will decide after Friday whether to form an exploratory committee for the state’s top elected job.

If she does, she will be the sixth Democrat in exploratory mode for this position; only former Speaker of the House James Amman is an officially declared Democratic candidate for governor. Already weighing a run are: Secretary of the State Susan Bysiewicz, Ned Lamont, former Stamford Mayor Dannel Malloy, Ridgefield First Selectman Rudy Marconi and state Sen. Gary LeBeau of East Hartford.

Glassman conceded it is late in the year to be declaring an interest in the job with the party convention only five months away and serious candidates already raising money.

Glassman, who was first selectman from 1991-1999, was re-elected chief executive in 2007 and in 2009. An attorney, she also worked as special counsel to former Speaker of the House Moira Lyons and former Senate President Kevin Sullivan and was chief of staff in the lieutenant governor’s office.

As a Democratic leader in a Republican town, Glassman Monday said she wants to be able to add to the discussion as the state deals with current and projected deficits. Glassman said in her years as a chief executive, “I have been a strong supporter of regional services,” as an efficient way to reduce expenses.

She said the town of 24,000 residents was able to reduce its budget by 3 percent after reaching a consensus on givebacks and a wage freeze with town workers.

Glassman was nominated in 2006 for lieutenant governor on a ticket with Malloy, but ended up running with New Haven Mayor John DeStefano Jr., who won the primary; she outscored Scott Slifka, West Hartford mayor, for the position.

There was a lot of speculation in the fall that Glassman would run for secretary of the state and her GOP opponent challenged her to pledge to serve out her term, if re-elected. “I’ve worked hard for Simsbury these past two years, and I am looking forward to serving the town over the next two years,” Glassman said at the time. “I have no plans to run for secretary of the state.”

Gerry Garcia of New Haven is the only official Democratic candidate for that office at this point, a position state Sen. Jonathan Harris, D-West Hartford, and state Rep. James Spallone, D-Essex, are exploring, while House Majority Leader Denise Merrill, D-Storrs, also expects to officially file as a candidate.

Cafero will not run for governor
By ROBERT KOCH, Hour Staff Writer
Dec. 21, 2009

Citing his family and Connecticut's fiscal crisis, Lawrence F. Cafero Jr. of Norwalk announced Monday that he will seek another term as House Republican leader rather than run for governor next year.

Cafero, who had formed an exploratory committee for an undisclosed statewide office, told The Hour that he and his family did soul searching after Republican Gov. M. Jodi Rell announced she wouldn't seek another term.

"I visited a lot of places around the state, a lot of people on Republican town committees, voters in general. But most importantly, it always came down (to that) I've tried to live my life family first," Cafero said. "We have had many, many hours of soul searching and discussions and we've come to the conclusion that this is not the right time for me enter the race for governor. It is the kind of effort, I think, that needs everyone's involvement, certainly from a family point of view. It is a full-time commitment, and given where our family is at this point ..."

The House Republican leader said his daughter recently has been transferred to work in London, a son is graduating from George Washington University, and another son will be graduating from Brien McMahon High School next spring. His wife, he said, has a demanding career.

Cafero, who is in his ninth term representing the 142nd District and has been House Republican leader for two terms, announced his decision during a meeting with The Hour editorial board. Afterward, he headed to Hartford, where legislators are scheduled to go into special session this afternoon to address a budget deficit mitigation plan put forward by Democrats, who hold the majority in both the state House and state Senate.

There, Cafero hopes to put forward a Republican alternative plan, which he said would eliminate the estimated $466-million budget shortfall without cutting $84 million in aid to municipalities, as called for in Rell's mitigation plan. Cafero told The Hour that the state's fiscal woes was "another big factor" in his decision.

"I'd like to return as Republican leader," Cafero said. "These are by no exaggeration the worst fiscal times we've ever faced in the state of Connecticut, and I take my job very seriously as Republican leader, putting together alternatives proposals to that of the majority (party), frankly keeping their feet to the fire."

Cafero, who formed the exploratory committee in April, was among a number of people who expressed interest in the running for governor.

Democrat Ned Lamont, Republican Tom Foley, Democrat Ridgefield First Selectman Rudy Marconi and Democratic former House Speaker James Amann have already announced their intentions. It is expected that former Stamford Mayor Dannel P. Malloy will announce his intentions to run as will Secretary of the State Susan Bysiewicz and Senate Minority Leader John McKinney.

Lt. Gov. Michael Fedele, a Republican from Stamford, early this month launched his campaign for governor.

Cafero said Fedele's candidacy played no role in his decision not to run. The Norwalk Republican said he is not endorsing any candidates at this point.

"I need to speak to all the candidates," he said.
Campaign finance reform law faces uncertain future
By Mary E. O’Leary, New Haven Register Topics Editor
Sunday, December 13, 2009

Advocates are pushing for a fix to the state’s campaign financing law, sooner rather than later, as federal courts begin hearings next month that could further complicate the 2010 elections.

Driving the issue is the potential that there will be two millionaire candidates for governor — Republican Tom Foley and Democrat Ned Lamont — who will opt out of public financing, which could leave opponents at a big disadvantage unless there is an approved public funding method to help them compete.

Portions of Connecticut’s campaign finance legislation were ruled unconstitutional by U.S. District Judge Stefan R. Underhill in August and an appeal by state Attorney General Richard Blumenthal is being fast-tracked for oral arguments before the 2nd Circuit Court of Appeals on Jan. 13.

Meanwhile, the areas Underhill ruled against, namely additional requirements for minor parties to qualify for assistance, and a “trigger,” that would release additional funds for candidates being badly outspent by wealthy opponents, are stayed until a final ruling.

On the national level, the betting among high court watchers, is that the majority of justices will overturn 100 years of legal precedent that reined in corporate and union campaign spending.

Connecticut is one of 24 states where bans on direct corporate and union funds could be overturned in the Citizens United v. Federal Election Commission case.

It involved a fairly narrow question on whether a film critical of Hillary Clinton in 2007 was subject to election disclosure and funding rules. But, in an unusual move, the Supreme Court ordered a second hearing to address the underlying question of whether corporations have a constitutional right to spend unlimited amounts of money to promote or defeat candidates.

Having a constitutionally sound law in place for Connecticut is not only important to address Underhill’s concerns, but also to be able to withstand the flood of corporate money, if the Supreme Court allows direct corporate financing of elections, said Karen Hobart Flynn, vice president for state operations at Common Cause.

The wide open gubernatorial election in 11 months, now that incumbent GOP Gov. M. Jodi Rell has decided not to run, has attracted six Democrats: Lamont, Secretary of the State Susan Bysiewicz, former Stamford Mayor Dannel Malloy, East Hartford state Sen. Gary LeBeau, Ridgefield First Selectman Rudy Marconi and former House Speaker Jim Amann, who is the only officially declared candidate.

On the Republican side, Lt. Gov. Michael Fedele is running, as is Scott Merrell and Foley.

Rell has suggested that lawmakers take up changes to the public financing law that would make the qualifying rules uniform for majority and minority parties, reduce the size of the grants and delay the increase in grant amounts until 2014.

‘ALL IN LIMBO’

Public financing went into effect in Connecticut in 2008 for state legislative seats at a cost of some $9 million with almost 80 percent of candidates participating. The 2010 election will be first time it would cover the statewide offices.

The uncertainty of the rules and how much will be available in the public financing system has candidates more than a little nervous.

“All of us are totally up in the air,” Amann said. “We are all in limbo.”

The largest fundraisers, as of the October filing, are Malloy with $373,000 from almost 1,700 contributors and $338,000 from 1,444 contributors to Bysiewicz, both of whom as still operating under exploratory committees, which allow them to collect $375 per person.

To qualify for public financing, gubernatorial candidates are limited to $100 per person and must raise $250,000 to qualify for $1 million in funding for a primary and $3 million for the general election.

Rell suggests that the funds for a primary be reduced to $250,000 and for the general election to $2.5 million, but the candidates and public financing experts think that is too low.

“The system needs to be fixed as quickly as possible to remove the uncertainly that now exists,” said Roy Occhiogrosso, campaign strategist for Malloy.

But he said the candidates are operating under the assumption that the amounts won’t change as cutting them could make the races uncompetitive.

He said the First Amendment questions of access should be addressed in a way that is fair for everyone, but too much tinkering could fix one aspect of the program and break another.

Tanya Meck, campaign spokeswoman for Bysiewicz, said if the amounts are reduced too much, “you render it useless. The point is to equalize the playing field for everyone, otherwise only wealthy candidates can compete.”

PULLING THE TRIGGER

The trigger in Connecticut law that Underhill rejected was a dollar for dollar match to expenditures by nonparticipating candidates up to 100 percent of the original grant.

For instance, if a nonparticipating candidate spends $8 million on his campaign, a gubernatorial candidate who opts for public financing, would get his or her original $3 million grant and a second $3 million match.

If an outside group spends $5 million to fight against his election, the candidate with public financing would get another $3 million to compete.

“The thinking is you don’t have to spend dollar for dollar. You just need enough to get your message out,” said Hobart Flynn.

Foley has been clearer about his intentions to not use public funds, while Lamont won’t address it as he continues to explore whether to get into the race, but other party officials feel he will tap into his millions. When he was the Democratic U.S. Senate candidate in 2006, he used $14 million of his own money to match spending by his opponent, Joseph I. Lieberman.

Beth Rotman, director of Connecticut’s campaign finance program, said Rell’s proposal “shows leadership and moves the discussion along,” although some of her suggested cuts “are a bit much.”

The one thing everyone agrees on is elimination of the “revision clause” in the state’s campaign finance law. “It would be a simple surgical remedy that would do a tremendous amount of good,” Rotman said.

As it now stands, if the courts overturn or block Connecticut’s program after April in an election year, the revision clause gives lawmakers a week to fix it or public financing dies and the system reverts to the previous system where lobbyists and special interests could donate freely to campaigns.

Rotman is also concerned about the amount of money the state will have set aside to fund the program. Lawmakers have already taken out $18 million to offset a state budget deficit, while Rell is proposing draining another $12 million to help deal with a $337 million shortfall for the current fiscal year.

According to the state Office of Policy and Management, this leaves close to $42 million in the pot, but there is a big question if that is enough.

“We can’t afford to return to the days of ‘Corrupticut,’” Common Cause said in response to a state GOP legislative proposal to gut the public financing fund because of the deficit.

‘Corrupticut’ was coined when numerous state officials went to jail for misuse of their offices during Gov. John Rowland’s administration, including Rowland. It was also the impetus for the campaign finance reforms now being challenged.

Rep. James Spallone, D-Essex, chairman of the Government Administration and Elections Committee, favors repealing the revision clause, but holding off on anything more extensive until they can gauge if the appeal will hold up.

State Sen. Majority Leader Martin Looney, D-New Haven, agreed that lawmakers should refrain from any radical changes in the law, as this will undermine Blumenthal’s arguments before the 2nd Circuit in New York.

Tom Swan of the Connecticut Citizens Action Group, which brought the legal challenge to the Connecticut’s Citizen Election Program because of its disparate treatment of third-party and petitioning candidates, feels legislators should make changes to comply with Underhill’s ruling.

“I believe they should address minor party barriers and look for a mechanism to address the trigger issues, while eliminating the April 15 poison pill,” Swan said.

Hogan Flynn is worried about the upcoming Supreme Court ruling on corporate election spending and favors a strong public campaign finance-type program like the Fair Elections Now Act sponsored in the U.S. House by U.S. Rep. John Larson, D-Conn. as the best response.

FAIR provides a basic grant after a candidate has raised donations of $100 or less up to a certain level. Continuing small in-state donations would then be matched fourfold with public dollars, which allows those who are targeted by large amounts of corporate spending to continue to raise money.

Hobart Flynn is the most insistent that time is of the essence.

“We don’t have time to wait for the 2nd Circuit to rule,” she said. “You need to have some kind of backup. The FAIR model magnifies the power of small contributors, away from lobbyists who want something in return. It encourages people from different demographics to give,” she said.

On the other side is Chris Healy, chairman of the state Republican party, who wants to see the public system toppled in Connecticut.

“The Connecticut GOP hopes the court rules for the plaintiffs on constitutional grounds and ends this political welfare system,” Healy said.
A wide open race for governor...
With Rell's departure, the hopefuls in the field are many
DAY
By Ted Mann
Article published Nov 15, 2009

Hartford - Gov. M. Jodi Rell won a landslide victory in her race for a full term in 2006, but don't be surprised if you don't recall the finer details of that contest.

Eclipsed by a national wave that was pushing the House of Representatives into Democratic hands, and by the operatic drama of Sen. Joseph Lieberman's primary defeat and party-jumping general election victory, Rell rolled to a new four-year term over New Haven Mayor John DeStefano Jr. while remaining virtually under the radar.

But while some Democrats may have worried the same could happen again in 2010 - as a race for the statehouse unfolds in the shadow of the increasingly crowded and heavy-spending race by Sen. Chris Dodd against his many opponents - all that changed on Monday.

Rell's decision to bow out after this year and not seek a second full term as governor will ensure that Connecticut will have a new governor, candidates have said, and will demand public and media attention for a contest that might otherwise have been drowned out by the noise of the Senate and national races.

"This is great," said Stamford Mayor Dan Malloy, who is making his second run for the Democratic gubernatorial nomination in a field that also includes Secretary of the State Susan L. Bysiewicz and Lieberman's 2006 primary foe, Greenwich businessman Ned Lamont.

"The press was not likely to cover a Democratic (primary) contest if the governor was in it," Malloy said Thursday at the state Capitol, where he attended a celebration of the one-year anniversary of the first same-sex marriage ceremonies in Connecticut.

"So, for a guy like me, who represents one tiny portion of this state in a media market that has nothing to do with New Haven or Hartford, the chance for me to break through was impeded."
"Now, it's no longer impeded. I'm going to get coverage."

To Malloy and other contenders, Rell's decision not to run, and recent poll results from Quinnipiac University show a "wide open" race for governor, in the first election without an incumbent since Lowell P. Weicker Jr. chose not to run for re-election in 1994.

It's wide open on both sides.

Rell's surprise announcement that she would not seek a new term triggered a wave of interest in her own party, with Lt. Gov. Michael Fedele all but declaring himself a candidate for the nomination, and other prominent Republicans, including House Minority Leader Lawrence F. Cafero Jr. of Norwalk and Senate Minority Leader John McKinney of Fairfield, strongly considering candidacies.

(The Republican field has already yielded its first faux pas: Fedele told reporters on the day of Rell's announcement that the governor had privately offered her endorsement, but Rell walked that back in a public appearance the next day, remaining noncommital.)

"We're going straight into a campaign committee - there's nothing to explore," Fedele said last week in an interview. "I know the job, I know what needs to be done, I know what I want to do."
He also said he remained confident that he "will have the support of the governor moving on."

Among Democrats, a Quinnipiac University poll last week showed a divided and still largely undecided electorate, with three of the potential candidates - Bysiewicz, Lamont and Malloy - far ahead of the rest of the pack.

And it showed Bysiewicz, in her third term as secretary of the state, would have been within striking distance of Rell in a head-to-head matchup, trailing by just 40 percent to 46 percent.
With the governor out of the race, Bysiewicz said Thursday, Democrats are well-positioned to take back an office they haven't won since 1986.

"She had been a very popular governor, and I think it is always more difficult to run when you have to go up against an incumbent, particularly one who has been popular," Bysiewicz said. "So there is a sense that the Democrats have an opportunity, and I'm very pleased to be the front-runner among Democrats."

But the poll results suggest a lot of potential for change in the Democratic field. Lamont scored support from 23 percent of party voters, compared to 26 percent for Bysiewicz and 9 percent for Malloy. And Malloy's campaign was pushing the message that most of Lamont's support seemed to be coming from voters sympathetic to Bysiewicz, while the majority still haven't seen enough of any of them to form a strong opinion.

Meanwhile, insiders at the state Capitol were circulating the name of another potential Democratic challenger, U.S. Rep. Chris Murphy, D-5th District. A former state senator who helped push through Connecticut's smoking ban in bars and restaurants, Murphy is serving his second term in Congress since defeating veteran Rep. Nancy Johnson in 2006. A spokeswoman for the congressman declined to comment on those rumors Friday.

And while Democratic candidates wait to see if Attorney General Richard Blumenthal will reverse a previous decision and enter the governor's race, Republicans are also watching for potential late-breaking entries, especially from Kevin J. O'Connor of West Hartford, a former congressional candidate who later served as U.S. Attorney for Connecticut and as the third-ranking official in the Department of Justice under President George W. Bush.

O'Connor is considering a run for governor, he confirmed on Thursday, but has yet to make a decision.

"What I need to do is have a conversation with my family about whether this is the right time to go back to public service," O'Connor said. "I recognize that the decision can't be delayed too long because the race is not that far off."

Blumenthal, too, acknowledged that he is considering a run after being "deluged" with calls and comments since Rell backed out, urging him to reconsider his planned run for another term as attorney general.

"I'm hearing from a lot of people about the challenges and opportunities of a gubernatorial campaign, and I'm listening to them," Blumenthal said in an interview, in which he acknowledged he is also weighing other races, including a rumored run for the U.S. Senate in 2012, when Sen. Joseph Lieberman would be up for re-election.

"I love the job I have now, but I certainly would seriously consider other challenges and opportunities to serve Connecticut and its citizens," Blumenthal said, "whether as governor or senator. But, you know, I'm not going to say more than I have already."


Gov. Rell Had A Balanced Approach
The Hartford Courant
By DANIELA ALTIMARI
November 10, 2009

She is the moderate Republican who backed civil unions for same-sex couples, embraced stem cell research and signed a sweeping public campaign finance law.

She's the empathetic cancer survivor quick to dispense practical advice, the grandmother who prefers the company of her family to hanging out with backslapping pols.

And, to her critics, she's the detached leader with little interest in public policy, or the rigors of governing.

Although M. Jodi Rell, the one-time PTO mom who rose to become one of the most popular governors in state history, has 14 more months to hone her legacy, the broad outlines have already been written.

Rell was, at least initially, the accidental governor, inheriting an office shrouded in disgrace after the resignation of Gov. John G. Rowland. But she soon settled into her new role, defining her public profile as Connecticut's fair-minded leader driven not by ideology but rather by old-fashioned common sense.

"She exudes a certain decency and that was her political calling card and strongest attribute," said William Curry, a Democrat who lost the governor's race to Rowland in 2002.

" Democrats often deride her for being merely 'nice,' but in this world, 'nice' gets you a lot and not just in politics," he added.

Rell's temperate political philosophy is another reason for her success, Curry said. "She may have won the prize for least ideological Republican of her generation, and that went over big in Connecticut," he said.

Senate President Pro Tem Donald Williams, a Democrat from Brooklyn, agreed. "I think the governor was at her best when she put aside partisan politics and did not give in to extremist trends nationally in the Republican Party," he said.

As two examples, Williams cited Rell's support of his controversial school nutrition bill and her ability to work with Democrats in Congress to keep the Groton submarine base open.

But niceness and nonpartisanship go only so far, especially in a time of economic hardship. In the past year, as the state's fiscal situation grew more dire, Rell ramped up her rhetoric and drew a harder line on taxes, which fractured her relationship with the legislature's Democratic majority, said Howard Reiter, a professor of political science at the University of Connecticut.

"She discovered her inner Republican and became a bit more feisty about resisting tax increases, which created a bit more friction with the legislature," Reiter said. "The financial crisis pushed her in a different direction. Her underlining ideology turned out to be a bit more conservative than she let on in the past."

Rell's actions in the past year have also shaded another part of her legacy, Reiter said. Coming into office on the heels of the Rowland scandal, she made good government a hallmark. But recently, questions have emerged over her office's use of a taxpayer-funded study for political ends.

"Clearly, she's someone who helped restore a sense of balance and integrity to the state after Rowland resigned," Reiter said. "Up until this year, her legacy on ethics would have been somewhat different."

Rell isn't one of those governors who relish deep debates on the arcana of public policy, Curry said. He cited her failure to achieve property tax relief and health care reform as two of the biggest disappointments of her tenure.

"She had a superb political operative in Lisa Moody, but what Jodi didn't have was a superb policy person, and one of the things that went wrong for her is that Moody was left wearing both hats when she was really only good at one," Curry said.

Serving as governor was never part of Rell's master plan, said her longtime friend, former state Rep. Norma Gyle, a Republican from New Fairfield who, like Rell, was first swept into office on the strength of the Reagan tide of 1984.

"We used to talk about where we'd go," Gyle recalled. "She said, 'I think I should be ready for what comes along.' She has an adventurous spirit and she was always willing to take a chance to go for it."

As a state legislator, Rell would often go door to door, Gyle said, and not just at election time when she was looking for votes. "She genuinely wanted to know how people were doing," Gyle said.

It's an impulse Rell never lost, Gyle said, even when she reached the highest level of state government. "She's a total straight arrow. ... What you see is what you get."

Copyright © 2009, The Hartford Courant
Gov. Rell Not Seeking Reelection in 2010; Stunning Announcement Shocks Capitol; Few Knew In Advance
Hartford Courant
By Christopher Keating  on November 9, 2009 5:24 PM | Permalink | Comments (0)

In a stunning announcement, an emotional Gov. M. Jodi Rell told reporters shortly Monday evening that she is not seeking reelection.

Rell did not give an immediate reason, other than saying "it's time'' to leave office after a long career that includes five years as governor, 10 years as lieutenant governor, and 10 years as a legislator.

Lt. Gov. Michael Fedele said that Rell has told him privately that she will support him - even if there are other Republican candidates in a potential primary in August 2010. Fedele reiterated his stance that he would run for governor if Rell did not.

In an emotional speech in front of about 25 reporters, camera operators, and staff members in her Capitol office, Rell said, "After much soul-searching, and discussion with my family, I have decided not to seek re-election next year.''

During a hastily called press conference, Rell said it has been "an honor" to serve the state. She cited accomplishments including ethics and campaign finance reform, noting that in 2004 she "came in at a troubling time in our state's history."

That was a reference to her ascension from lieutenant governor on July 1, 2004, after the resignation of former Gov. John G. Rowland during a long-running corruption scandal that later sent him to federal prison for 10 months.

While many political insiders have been debating for years over whether Rell would run or not, few actually knew for sure. That small handful included Rell's immediate family. Even they, though, did not know the timing. Rell said that she told her daughter about one hour before the press conference with reporters, and she called her husband from the Capitol to say that Monday would be the day.

Rell began the startling news conference that broke the calm of a Monday evening at the  Capitol with a typically folksy thank you to those who participated in a holiday food drive in recent days. She walked into the room with a smile on her face and no one trailing her to the lectern, making it seem that it could be just another announcement. That continued when she talked about the food drive, but then she switched gears.

"The second thing I'd like to do is I want to share the news" that she would not be a candidate next year.

Those few words will set off a major scramble among Republican hopefuls including Fedele, who already has said he would seek the governorship if Rell decided against running, House Republican leader Lawrence Cafero of Norwalk, and Senate Republican leader John McKinney of Southport.

"The governor's decision has nothing to do with what my decision will be,'' Stamford Mayor Dannel Malloy told reporters in the Capitol press room at about 6 p.m. Monday. Malloy had been traveling back from a regional conference in Boston and said he was in the area, so he came to see reporters at the Capitol.

Meanwhile, the race for the Democratic nomination will heat up because now many more Democrats will believe they have a chance to win in 2010. Democratic hopefuls include Malloy, Secretary of the State Susan Bysiewicz; former U.S. Sen. candidate Ned Lamont; former House Speaker James Amann; and state Sen. Gary Lebeau.

Fedele said, "I am proud to have served these four years coming up with her, and I have learned a lot from her and I'm going to miss her in that role - but we still have a lot of work to do and I look forward to completing this term with her."

Asked if he planned to follow through with his expressed intention to run if Rell pulled out, Fedele said, "I made my intentions very known I think that a number of months ago, ... that we would be doing that. ... So in the short term here, you will be hearing an announcement from me."

Asked if he was planning an exploratory committee, which Rell herself had formed, and which Democrats also have been using to test their prospects, Fedele seemed to rule it out.

"One of the things that I know having done this job for three years, I think I know where I'm going with it, so I don't think there's much to explore at this point.  ... I think what we need to do is take a look at what we've got going and put together an announcement, so that the people Connecticut can see what the future holds for them."

Rep. Stephen Dargan, a moderate Democrat who served in the legislature with Rell in the early 1990s and is still serving in Hartford, said, "She became the governor in one of the most difficult times in state history. She has always served the state in the best way that she could see. This past budget was, by far, more difficult than the income-tax years. She had some difficult tasks to go forward with this budget. She's been sick. Her husband has been sick. She has a number of grandkids that she probably wants to spend more time with.''

Rell has recovered from breast cancer, and her husband, Lou, has recovered from esophageal cancer. But she told reporters that her health had nothing to do with her decision.

Conn. bond outlook downgrounded (no spell check at the HOUR)
Norwalk HOUR
Associated Press
October 27, 2009

HARTFORD

A national bond rating agency has downgraded its outlook for Connecticut's credit rating from "stable" to "negative," citing choices made to cover the state's budget deficits.

Moody's Investor Services says it's concerned the state will issue $947 million in bonds to cover last fiscal year's deficit, and how the new, two-year $37.6 billion budget borrows against a future, unnamed revenue stream to raise $1.3 billion.

Such one-time solutions, Moody's says, create future budget problems and leave the state vulnerable if an economic recovery comes slower than expected. Moody's says the state will likely struggle more than others to balance its budget. The same report, however, did not downgrade the state's relatively high bond rating on approximately $12 billion in outstanding general obligation bonds.


Governor nixes budget legislation
Stamford ADVOCATE
By Susan Haigh, Associated Press
Posted: 10/06/2009 07:04:51 AM EDT
Updated: 10/06/2009 07:05:12 AM EDT

HARTFORD -- Gov. M. Jodi Rell said Monday she has vetoed one of several bills passed last week that spell out details of the new two-year $37.6 billion budget.  The bill is one of two that outlines certain general government spending. Rell said she vetoed the bill because it placed too many limits on where she can cut spending in order to keep the budget in balance over the coming months.  The Republican governor said the legislation would have removed options for her to save the state money. Rell is charged with finding hundreds of millions of dollars in spending reductions under the new budget.

For example, the bill extends a moratorium for two years on the sale, lease or transfer of state-owned group homes for the developmentally disabled. It also restricts reductions to certain parts of the Judicial Department's budget.

"We can't find savings if you tie the hands of the administration," she said...full story here.


State Legislators Finally End Longest Budget Battle
The Hartford Courant
By CHRISTOPHER KEATING
October 3, 2009

Ending the longest budget battle in state history, the General Assembly approved the final nuts-and-bolts details of the spending plan Friday, opting to preserve educational programs and deciding to postpone a controversial in-school suspension program by one year.

The Democratic-controlled legislature approved multiple items that have been opposed by Republican Gov. M. Jodi Rell, including $1.3 million for a study on the children of incarcerated parents. It remained unclear Friday night whether Rell would veto the bill, and her spokeswoman said that Rell would not announce any decisions until next week.

Legislators were relieved to finish their work, noting that it was unprecedented to be voting on the so-called budget implementation bills in October — more than three months after the fiscal year started.

One of the controversial provisions of the legislation would prevent Rell from making cuts in an account of the judicial branch that amounts to $7.8 million. Rell's budget director, Robert Genuario, said in a letter to top legislators that the state cannot afford a special exception for the court system during the worst economic downturn in decades.

"It is particularly unconscionable," Genuario wrote, "to provide a blanket exception to one branch of government at the same time that other state agencies are being burdened with budgetary reductions that impact their ability to perform core services for our veterans, disabled students, and schoolchildren."

House Republican leader Lawrence Cafero of Norwalk also railed against a plan to spend $1.3 million over two years for the study regarding the effects on children whose parents are in prison. The study would be completed by a think tank at Central Connecticut State University in New Britain.

While saying that it is "a worthy subject to study," Cafero noted that the issue has been studied by many other entities through the years around the nation.

Cafero said he saw 316,000 hits on a Google search of the subject in less than one second. Rather than studying the issue again, the state could save more than $1 million by simply buying every study that has ever been written on the matter, he said.

"It would cost us $8,500 — shipping included," Cafero said of buying the previously published material. "Every study, every book."

"When we say we can't cut any more, isn't it true, folks, that this is one area where we don't need to expend $1.3 million?" Cafero asked on the House floor. "That is the problem with government. That's why people aren't too high on us these days."

When no Democrats responded to Cafero's speech, House Speaker Christopher Donovan called for a vote. Along mostly party lines, the bill passed 96-35, with 20 legislators absent.

In another controversial matter, Rell had also opposed an attempt to revise a funding formula that would have increased money to only one town, Mansfield, and decreased funding to all 168 other municipalities in the state. House Majority Leader Denise Merrill, a Democrat who represents Mansfield, said she withdrew the proposal from the bill after saying it remained unclear exactly how the complicated state law would affect her hometown.

"We're going to look into it some more," Merrill said. "I am still convinced that my position is the right one."

Merrill and other Democrats said that Mansfield has been improperly penalized under an obscure provision of the law that failed to count the University of Connecticut students in the town's overall population. With a lower reported population, the town has been receiving less state aid than expected in a particular grant. Merrill said she wanted to fix the formula as a matter of fundamental fairness, but Republicans said it was an unfair maneuver by a powerful legislator to help only one town at the expense of all others.

Free Food

In a point of agreement with Rell, legislators voted Friday to change a law that would allow parishioners at churches to make meals at home in potluck dinners and bring them to homeless shelters. Currently, the law states that meals that are given away must be cooked in a licensed kitchen — meaning that the long-standing practice by some charitable groups is technically illegal.

Legislators were dumbfounded to learn that section 19a-36 of state law prohibits a practice that has been going on for decades.

Attorney General Richard Blumenthal asked for the change, which would allow the free distribution of food. Currently, charitable organizations can sell food at bake sales that is cooked in unlicensed kitchens. But the distribution of free food is in a different category.

The issue arose in Middletown when the local health department cited the local soup kitchen of St. Vincent De Paul for distributing food from unlicensed kitchens. In a related matter, a group called Middletown Food, Not Bombs that consists mainly of Wesleyan students has been distributing free food for about a decade. But Middletown health officials received an anonymous call that questioned whether the group had a food license. The local officials wanted the group to maintain records of the people cooking the food in order to act quickly in case of an outbreak of food-related illness.

Education Bill

Upstairs on the third floor in the state Senate, the longest debate of the day centered on the annual education implementation bill, which included details on public school construction, transportation, priority schools, education grants, in-school suspension, and the money that would be allocated to each of the Hartford magnet schools.

Sen. John Kissel, an Enfield Republican, asked about substitute teachers in the public schools who do not have a bachelor's degree. Those substitutes can teach for 10 days if they lack a college degree, said Sen. Thomas Gaffey, a Meriden Democrat who is co-chairman of the education committee.

As part of a bill that was approved 32-1, senators postponed the installation of an in-school suspension program until July 1, 2010. Republicans argued that the measure is an unfunded mandate that will be costly because adults must be paid to watch the students during the suspension, while Democrats said it was a worthwhile effort that would prevent students from getting into trouble if they were sent home on suspension.

Sen. Edith Prague, a Columbia Democrat and former schoolteacher, said, "In-school suspension is a much better way to deal with kids who are causing trouble."

Sending them home "to run the streets" is a bad idea, Prague said. Paying for tutors for an out-of-school suspension beyond 10 days would be even more expensive, she said.

Lawmakers also voted to re-establish the Long Island Sound license plate accounts — only one day after Blumenthal told Rell and legislators that money could not be sent to the state's general fund.

"Diverting these moneys into the general fund made no sense, gutting a successful program while providing a pathetic pittance for deficit reduction," Blumenthal said. "I will continue to fight for a cleaner and healthier Long Island Sound."

Copyright © 2009, The Hartford Courant

New Bottle Deposits, Higher Fees
Hartford Courant
By CHRISTOPHER KEATING
September 30, 2009

Bottled water wasn't on the radar screen when the state's bottle bill was passed three decades ago. But time, and the state legislature, have caught up.

On Thursday, water and other non-carbonated beverages sold in bottles will join bottled soda and beer in requiring nickel deposits, redeemable when shoppers return the empties. The change was approved by the state legislature this year — unanimously in the House of Representatives.

As a result, shoppers will be required to plunk down an extra $1.20 on a case of bottled water to cover the deposits.

Expansion of the bottle bill is expected to take millions of plastic bottles out of the waste stream.

The provision marks a major turnaround in policy in Connecticut. For years, water-company lobbyists fought fiercely against the law at the Capitol, but they lost this year because the state expects to receive $17 million in unclaimed money from consumers who throw away their bottles without bothering to claim the 5-cent deposit.

When the original bottle bill was passed in 1978 and took effect two years later, lawmakers could not have foreseen the explosion in the popularity of bottled water, so it was never mentioned in the law.

"Expansion of the bottle bill — the first major expansion of the nearly 30-year-old program — has the potential to remove nearly 500 million containers a year from Connecticut landfills, protecting the environment while reducing litter," Gov. M. Jodi Rell said.

Oct. 1 is the traditional date for new laws to take effect in Connecticut.

Several other laws take effect Thursday. Among them:

•Fee Increases. Hundreds of fees across state government will increase to close the budget deficit caused by the worst economic downturn in decades. Fees in virtually every category of governmental oversight will increase, including accounting, banking, insurance, agriculture, consumer protection, elections enforcement, labor and public health.

Annual permits for package stores will increase to $500, up from $400, and liquor permits will increase in every category.

Numerous business fees collected by the secretary of the state's office will rise, the first major increases in 15 years. For example, an annual report for an American company that is filed with the office in Hartford will now cost $150, double the previous rate of $75.

•Cigarette Taxes. Smokers will pay $3 a pack in state taxes, up from $2 a pack. That means a two-pack-a-day smoker will pay $6 a day, or nearly $2,200 each year, in cigarette taxes alone.

In addition, the tobacco products tax — which applies to cigars, pipe tobacco and similar products — goes up from 20 percent to 27.5 percent of the wholesale price, and the tax on snuff tobacco goes from 40 cents to 55 cents an ounce.

Identity-Theft Penalties. Criminal penalties will be strengthened Thursday for anyone convicted of identity theft, one of the fastest-growing crimes in the computer age. Criminals who steal the identity of a person over the age of 60 and remove more than $5,000 can be charged with first-degree identity theft, which is a Class B felony.

The new law also allows the state to seize money that was obtained through an identity theft scam, allowing that money to be recovered and eventually returned to the victims.

National statistics show that Connecticut ranks highest in New England for identity scams, prompting the changes. The statute of limitations will also be extended to three years, rather than two, to help victims file lawsuits against criminals who have stolen their identity.

"The statistics and the stories show that identity theft is a serious crime that can severely damage the reputation of its victims and cause long-lasting financial difficulties," said Sen. Thomas Colapietro, a Bristol Democrat who co-sponsored the law.

•Emergency-Vehicle Road Rules. For most drivers, the rules of the road involve common sense. One of those rules is that drivers should pull over and get out of the way when an ambulance, firetruck or police car is approaching with lights flashing and siren blaring.

Now, it will be known as the "slow down, move over" law. Previously, it was simply a courtesy that some drivers chose to ignore when the ambulance was moving through a crowded intersection.

To spread the word, the state police and AAA will unveil a campaign Thursday on the new law.

•Driver's License Exam. In another new motor-vehicle law, 16- and 17-year-olds who want to receive a driver's license must now pass the "DMV final exam" first. This is separate from the 25-question test that teens already must pass when they are trying to receive a learner's permit.

•Pet trusts. A new law will allow for the care of pets after their owners are gone. A pet trusts law will allow owners to create trusts that will ensure that their beloved animals will not be neglected.


ACTION!  FINALLY!
Governor Rell announces after the vote on a biennial budget that she has elected to line-item veto the worst offenders in what she believes to be a bloated budget.
SEVEN-MONTH BATTLE ENDS
Connecticut Has A Budget, Minus Rell's Signature
The Hartford Courant
By CHRISTOPHER KEATING
September 2, 2009

Ending the longest budget battle in state history, Gov. M. Jodi Rell said Tuesday that she will allow a budget plan written by the legislature's Democratic majority to become law without her signature...story here.


Conn. Campaign Finance Law Ruled Unconstitutional
NYTIMES
By THE ASSOCIATED PRESS
August 28, 2009
Filed at 2:22 p.m. ET

NEW HAVEN, Conn. (AP) -- A federal judge has ruled that Connecticut's public campaign finance law, seen by some as a possible national model, is unconstitutional because it discriminates against minor party political candidates.

Judge Stefan Underhill ruled late Thursday that a part of the law that provides a voluntary public financing scheme for candidates for statewide offices and state lawmakers puts an unconstitutional burden on minor party candidates' First Amendment right to political opportunity.

He says the program, known as the Citizens Election Program, enhances major party candidates' strength beyond their past ability to raise contributions, providing them public financing ''at windfall levels.''

The Green and Libertarian parties and others sued the state, arguing the law makes it difficult for minor party candidates to meet the criteria for getting public funds for their campaigns.

Attorney General Richard Blumenthal said the state will appeal the ruling to the 2nd Circuit U.S. Court of Appeals and will seek a stay of the ruling so that the program can continue operating.

''We believe it deserves review by the court of appeals because it conflicts substantially with decisions of the United States Supreme Court on some issues,'' Blumenthal said Friday. ''Certainly this decision raises significant legal obstacles to the campaign finance reform movement here and around the country but it's only one ruling very early in an ongoing court battle,'' Blumenthal said.

Mark Lopez, attorney for the Green and Libertarian parties, said he was ''absolutely delighted'' with the ruling.

''We hope the legislature is called into session and quickly fixes this in time for the 2010 elections,'' Lopez said.

Andrew Schneider, executive director of the ACLU of Connecticut, which represented the Green and Libertarian parties, called the ruling ''a victory for free speech and equal protection for all candidates.''

''We are all for laws that increase the ability of more people to participate in the democratic process, but Connecticut's law did the opposite by creating a different set of rules for unaffiliated and minor party candidates that made participating even more difficult,'' Schneider said.

But Gov. M. Jodi Rell insisted Connecticut's law is a national model and that she supports appealing the decision. She did say the law could be changed to address the concerns of minor parties.

''It was, and will remain, the means to keep special interest and lobbyist dollars out of our election process,'' Rell said.

Connecticut lawmakers adopted the campaign reforms in 2005 response to corruption scandals involving former Gov. John Rowland and other officials.

Under the law candidates can receive $25,000 for a state House race and $85,000 for a state Senate race if they raise a certain number of contributions in $100 or less increments from individuals. But minor party and petitioning candidates must satisfy additional requirements, including having to obtain signatures or having had received a certain percentage of votes in the last general election.

Underhill said the qualifying criteria for minor party candidates to get public funding are so difficult to achieve that most never become eligible for public funding at even reduced levels.

To qualify for partial public funding, candidates from minor political parties had to win at least 10 percent of the vote in the previous election or collect at least 10 percent of the signatures of registered voters. Full funding required 20 percent.

Underhill wrote that the legislature ''essentially set the threshold criteria at the level guaranteed to ensure extremely minimal minor party participation'' and said the decision ''raises the specter of major party entrenchment.''

He contrasted Connecticut's public financing system with Maine and Arizona, where minor party candidates are not subject to additional qualifying criteria.

The law also discourages minor party candidates from participating in the program because once they raise a minimum level of fundraising the program releases significant additional funding to the major party opponent, the judge said.

Underhill also said the law uses a statewide formula that permits any major party candidate to become eligible for full public financing even though in many legislative districts one of the major parties abandoned the race or the candidate lost in a landslide.

Blumenthal said the law does provide funding to minor party candidates on a sliding scale. He said officials were concerned about providing ''windfalls to candidates who have very small support.''

Underhill acknowledged that ''good motives'' underlie the law.

''Spurred on by a regrettable legacy of corruption that has pervaded all levels of elected office in recent decades, Connecticut is now commendably at the forefront of nationwide movement to increase transparency in the political process,'' Underhill wrote.

But he said the effort involves fundamental constitutional rights that demand narrow and carefully tailored regulations.

Underhill ordered state officials from operating the Citizens Election Program.

------

Associated Press writer Susan Haigh in Hartford, Conn., contributed to this report.


'Dire Times' Push Tribe Near Default
DAY
By Brian Hallenbeck
Published on 8/26/2009

On the brink of default, the Mashantucket Pequots are seeking to restructure $2.3 billion worth of debt, a senior adviser to the tribe said in interviews this week.  The debt is $1 billion more than the tribe's Foxwoods Resort Casino - North America's largest casino and once the world's most profitable - can sustain, the adviser said.

”We'll be asking creditors to take a big haircut,” he said.

While restructuring the debt with Malaysian investors, bondholders and banks, the Mashantuckets would continue to operate Foxwoods and MGM Grand at Foxwoods “as usual,” according to a plan drafted by Miller Buckfire, an independent New York investment bank.

”Restructuring will have no impact on operations,” reads the plan, a copy of which the senior adviser provided to The Day. The adviser discussed the tribe's fiscal crisis on the condition of anonymity, offering a rare look at the Mashantuckets' finances.  The tribe is at risk of defaulting Monday on the terms of a $700 million line of credit with a syndicate of banks, the adviser said.

”Our goal is to reduce debt,” he said. “My feeling is that further reductions (in the casinos' work force) would be counterproductive to the quality of the business.”

The tribe, grappling with the recession's devastating effect on the gaming industry, laid off hundreds of casino employees in 2008, and also trimmed the size of its government and cut benefits for tribal members, including their monthly “incentive” payments.  In a letter distributed by e-mail last week, Michael Thomas, chairman of the Mashantucket Pequot Tribal Council, updated tribal members on the seriousness of the situation.

”Earnings are down considerably and there are no signs of immediate improvement,” he wrote. “... These are dire financial times for our Tribe.”

Thomas, in the letter, said there would be no further reductions in the size of tribal government or in the incentive payments.

”Instead, Tribal Government and the Incentive will now be paid FIRST with any cuts or changes to our operation taking place after our members are paid,” Thomas wrote. “I will not waver from my pledge to protect the Tribal Government and the Incentive.”

Banks that are among the tribe's creditors have pushed for further cuts in tribal government, which already has sustained two rounds of downsizing, the senior adviser said. Over the last 36 months, he said, incentive payments have been cut in half.  While the amounts of individual payments are affected by such factors as age, level of education and employment, they now range, on average, from $90,000 to $120,000 a year, the adviser said.

Likening the tribe's finances to a waterfall, he said Foxwoods casino revenues are currently distributed on four levels, starting with Kien Huat, the Malaysian investment company that originally bankrolled Foxwoods, which opened in 1992. The tribe owes Kien Huat $21.2 million of the $160 million it originally loaned the tribe, the senior adviser said.

”They get first dibs,” he said.

Next in line is the banking syndicate headed by Bank of America/Merrill Lynch and Wells Fargo/Wachovia, followed by bondholders and finally the tribe.

”Our problem is we have no money for tribal government and the members,” the adviser said.

The tribe this month maxed out its line of credit, moving $91.9 million into cash accounts “to improve its negotiating leverage and better secure the interests of its members during the pendency of restructuring,” the Miller Buckfire plan says.

Thomas, who is up for re-election in November, referred to the money in his letter to tribal members last week. At the same time, he acknowledged differences among tribal leadership.

”Foxwoods is here to support our people not Wall Street,” he wrote. “Those who put the interests of bankers and bond holders ahead of our tribal community will have to answer to me. To make sure, I have introduced a resolution to take our last borrowed dollars and put them in a lock box only to be used for Government and Incentive.”

Thomas declined to answer questions about the tribe's finances.

Much of the tribe's debt is “legacy debt” incurred during Richard “Skip” Hayward's tenure as chairman from 1975 to 1998, a period of rapid expansion at Foxwoods, the senior adviser said. More recently, the effects of the recession and increasing competition have eroded the tribe's revenues.  The $1 billion MGM Grand at Foxwoods, approved during Thomas' tenure as chairman, opened in May 2008.

Although traffic at the casinos has remained constant over the past 18 months, spending per patron has fallen by 50 percent, the adviser said.

For the nine months ending June 30, the casinos' gaming revenues totaled $870 million, down from $926 million for the same period a year earlier. Expenses were reduced by $12 million. The amount spent on promotion remained constant.

In preparing the restructuring proposal, Miller Buckfire assumed the casinos could generate from $200 million to $225 million a year in EBITDA (earnings before interest, income taxes, depreciation and amortization), enough to support a debt of no more than $1.3 billion, the senior adviser said. The projections, however, might have to be re-evaluated in light of the economic outlook and future competition in Massachusetts, the plan says.

In fact, the prospect of a “destination” casino resort in the Bay State, where lawmakers could legalize casino gambling as soon as this fall, looms as the single greatest threat to Foxwoods, the senior adviser said.

The Mohegan Tribal Gaming Authority, which operates Mohegan Sun, Foxwoods' neighboring competition, has proposed building a resort in western Massachusetts.


In a session where Democrats hold a veto-proof majority in both houses, they still can't pass a budget...

How the CT Senate Democrat leadership arrived at their proposals...

Regionalization move by Governor:  http://www.cga.ct.gov/2009/TOB/H/2009HB-06389-R00-HB.htm
With editorial support around the state, Governor Rell takes the lead in tackling the economic crisis...Dems look under the bed for more $$.  Engorged?  How about the death penalty...taxing shopping bags.  Our question:  why did it take so long to add the chimp?  Was it because of this 2007 event?

Killing private economy is Connecticut's point
Manchester Journal-Inquirer
By Chris Powell
Published: Saturday, September 5, 2009 1:06 AM EDT

Weak and wobbly as she looks for allowing Connecticut's new state budget to become law without her signature and for settling with the General Assembly's Democratic majority even though it was unable to override her veto, Governor Rell, a Republican, is claiming credit for having fought for a few months.

"That fight has saved our taxpayers billions of dollars," the governor says. "I have forced the Democrats to sharply lower their demand for new taxes," from $3.3 billion in April, to $2.5 billion in June, to $1.8 billion in July, and finally to $900 million.

That's nice, but the new budget is still full of problems. Its savings come mostly at the expense of the poor and troubled rather than Connecticut's coddled government class. Its arithmetic is unreliable, with contrived revenue estimates, vague and unlikely savings, and borrowing for current expenses, renamed "securitization." And about 15 percent of its revenue comes from non-recurring sources, promising a huge deficit in the next budget.

While Connecticut indeed would have been even worse off if the Democrats had been in charge, the irresponsibility of this budget is horrific, the more so as it has denied Connecticut its best chance in 20 years to confront government's structural problem, its enactment of "fixed costs" for public employees and government contractors, costs put outside ordinary democratic control. The needy are to be sacrificed to preserve these "fixed costs."


* * *

Just hours before the governor announced her loss of nerve on the budget, the four candidates for the Democratic nomination for governor -- former House Speaker James Amann, Secretary of the State Susan Bysiewicz, East Hartford Sen. Gary D. LeBeau, and Stamford Mayor Dan Malloy -- went to work proving Rell right that things could be worse. The Democrats pandered to the government class at a meeting of the Working Families Party, the minor party held in reserve by Connecticut's public employee unions so that third-party candidates can be quickly run against any Democrats who do not follow union instructions.

"When did it become acceptable to cut people's wages?" Malloy asked indignantly, as if he had not noticed that public-sector wages in Connecticut long have been far higher than wages for comparable work in the private sector and that the public's own income, as signified by state and federal tax receipts, has collapsed.

Bysiewicz was even more gaseous. "Our quality of life," she told the public employees, "depends on our vibrant public sector" -- as if anything in Connecticut outside the public sector has been vibrant for the two decades since enactment of the state income tax, a period for which Connecticut has had no private-sector job growth, only growth in government.

Confronted unexpectedly after the meeting by the Journal Inquirer's state Capitol bureau chief, Keith Phaneuf, the Democratic gubernatorial aspirants said they would not actually promise never to seek concessions from public employee unions. Malloy noted that as Stamford's mayor he indeed had obtained concessions from city government unions. But of course he had not mentioned that to the public employees back in the hall. To the contrary, Malloy had left them with the impression that the collapse of the income of the taxpayers was the taxpayers' problem and nothing for government employees to worry about.

* * *

Governor Rell says she has found $100 million for state government to bestow over five years on the Pratt & Whitney division of United Technologies Corp. in exchange for the company's maintaining a thousand jobs in certain operations in Cheshire and East Hartford. The company is thinking of moving the work to Georgia and Singapore, where costs are much lower. The governor found the money -- $100,000 per job, $20,000 per job per year -- just hours after accepting a state budget that raises business taxes.

So now some Connecticut businesses will be taxed extra so that a big business and its politically influential union can get a subsidy from the government against the still-higher costs those other businesses will face. There could be no more blatant and arbitrary picking of winners and losers by the government than this. Instead of legislating for general prosperity, reducing business costs across the board, Connecticut continues to degrade its economy into political patronage and cost shifting. The state's lack of private-sector job growth is no mystery. In Connecticut killing the private economy is the very point of public policy.

-----

Chris Powell is managing editor of the Journal Inquirer.


SEVEN-MONTH BATTLE ENDS
Connecticut Has A Budget, Minus Rell's Signature
The Hartford Courant
By CHRISTOPHER KEATING
September 2, 2009

Ending the longest budget battle in state history, Gov. M. Jodi Rell said Tuesday that she will allow a budget plan written by the legislature's Democratic majority to become law without her signature.

The two-year, $37 billion budget includes an increase in the state income tax for millionaires, reduces the estate tax and increases the cigarette tax by $1 to $3 per pack. Rell is allowing the budget to take effect Sept. 8 even though her original proposal in February called for no tax increases, a goal she advocated for months. (Pictures: Gov. Rell Announces Budget Decision)

Her much-awaited decision Tuesday brings to a close a seven-month clash over taxing and spending that ended without a bipartisan compromise.Rell did use her line-item veto authority to reject $8.3 million worth of Democratic pork-barrel spending in the two-year budget, including $100,000 for the AIDS Interfaith Network and $50,000 for the Valley-Shore YMCA in Westbrook, both of which had been sharply criticized by House Republican leader Lawrence Cafero during the floor debate Monday night.

Among other cuts, Rell also rejected $1 million to be spent over two years for a "fall prevention" program that would teach the elderly how to avoid slipping on throw rugs or in other situations, spending that had also been sharply criticized by Republicans.

"The Democrats just could not cut, once again showing they are unwilling — or simply unable — to make meaningful reductions," Rell told reporters during a news conference on the Capitol's south portico.

But after a summerlong soap opera at the Capitol, Rell said a veto would simply send the state back to the drawing board and potentially postpone a resolution to the budget impasse for months. When asked at the news conference if she thought a veto would delay a resolution until Columbus Day, Rell responded, "I was thinking more like Thanksgiving." (Capitol Watch: State Legislators In Now-Infamous Solitaire Photo Identified)

Democrats seemed unfazed by Rell's veto of $8.3 million in earmarks and were relieved that the long budget battle was over. Senate Majority Leader Martin Looney, a New Haven Democrat, said the items were "a relatively minor issue overall in a $37 billion budget."

He noted that Rell had pushed for her own various "add-backs" that will become law in the final budget, including restoration of expenses and salary money for operating the lieutenant governor's office and more than $700,000 for the governor's office over two years for things such as dues for the National Governors Association.Democrats strongly opposed Rell's numerous attempts to cut the budget, and they held press conferences to show their support for public education, libraries, Head Start, financial aid for college students and the state's 62 family resource centers that provide services in public school buildings.

Although Rell dismissed the idea that the final budget was a compromise, Looney said: "There were compromises all along the way. Every budget is a compromise."

One compromise, he said, involved changes to Connecticut's estate tax — changes that Democrats had opposed through the years. The new threshold for collecting the estate tax will be $3.5 million, meaning that no tax will be owed for anyone who dies with less than that amount. Currently, the threshold is $2 million.

In addition, the legislature voted to eliminate the "cliffs" in the estate tax, which have angered Republicans since being enacted in 2005 in what some legislators described as a drafting error. Regardless of whether the language was an error or written purposely by lawyers, the legislature never changed the cliffs — until now.

Under the current law, a person who dies with $1.99 million owes no estate tax at all. But because of the cliff, a person who dies with one dollar over $2 million owes taxes on the entire $2 million, rather than only on the portion above $2 million. As such, the person just above $2 million owes more than $100,000 in taxes, while the person just below $2 million owes nothing.

Republican legislators voted unanimously against the Democratic budget, and many of them urged Rell to veto it.

"I agree with the governor's criticism of the budget, but I'm disappointed that she didn't veto the bill," said Senate GOP leader John McKinney of Fairfield. "At no time did the Democratic majority ever show a willingness to consider serious reductions in spending. It was quite clear that they were never going to reduce spending. The Democrats have the budget they want."

Cafero railed against the budget during debate on Monday. Before Rell's press conference Tuesday afternoon, Cafero said he did not know what Rell would do.

"I don't see any reason why she would sign this unless she just wanted it over with — and that's not a good enough reason," Cafero said.

Cafero said the budget will only create problems in the future.

"I have no doubts that the huge holes this budget creates will once again have to be filled with tax increases," he said. "While I understand Gov. Rell's urgency at getting a budget done to keep Connecticut working, as governor she plays a far different role than the legislature. This budget will ultimately cause more harm than good."

Copyright © 2009, The Hartford Courant
General Assembly passes $37.6B budget
DAY
Published on 9/1/2009

HARTFORD (AP) — The Connecticut General Assembly has passed a new two-year budget, but it remains uncertain if it will receive Gov. M. Jodi Rell's blessing.

Democratic leaders called the $37.6 billion tax and spending plan "a balanced approach" to closing the state's budget deficit and ending a monthslong impasse with the Republican governor that has dragged two months into the new fiscal year.

The bill passed the Democrat-controlled House on a 103-45 vote. Nine Democrats voted with the Republicans in opposition. The Democrat-controlled Senate passed it 22-13 early Tuesday morning, with one Democrat voting with the GOP.

House Majority Leader Denise Merrill, D-Mansfield, said she understands the frustration over lawmakers being unable to pass a budget, acknowledging that voters have approached her many times and asked why Connecticut is one of two states without budgets in place. Pennsylvania is the other.

"We had to come up with something that was rational, but humane," Merrill said, adding that key programs such as school-based health centers and early childhood education programs are protected. "Those were our two goals, and sometimes they're in conflict."

While Democrats tried to portray the bill as a compromise, it remained uncertain if Rell will sign it into law.

Rell's fellow Republicans made it clear they don't support the bill, arguing it doesn't cut enough spending. Instead, they said it relies too heavily on borrowing and focuses on risky revenue streams, such as higher income taxes on the wealthy — who can afford to move out of Connecticut — smokers and businesses.

"No new taxes, cut spending. That's what the voters are asking us to do," said Sen. Michael McLachlan, R-Danbury.

The GOP also warned of future deficits and even more tax increases once the $1.5 billion in federal stimulus money and the state's $1.4 billion rainy day fund is spent.

A couple of Democrats also spoke out about their party's budget.

"My constituents have told me repeatedly, they think we should not spend more than we take in in revenue. In my opinion, this budget does not achieve that kind of balance," said Rep. Linda Scholfield, D-Simsbury. "There's a constitutional requirement for us to have a balanced budget and I don't see that here."

Yet Senate Majority Leader Martin Looney, D-New Haven, said it was important not to cut services that help the poor and middle class during a difficult recession, such as job training and preventative dental care for the needy. He also said it was critical to preserve aid to cities and towns.

"It is an appropriate response to where the state finds itself today," he said.

In addition to debating the two-year budget, lawmakers on Monday approved borrowing nearly $1 billion to cover the deficit from the fiscal year that ended on June 30. That measure awaits Rell's signature.

Rell and legislative Democrats, who hold a veto-proof majority in the General Assembly, have been at odds for months over how to close an $8.56 billion deficit. While Rell has insisted on more spending cuts, the Democrats have argued they'd be too draconian and said they want the wealthy to pay more in income taxes.

In hopes of breaking the impasse, Rell last week reluctantly agreed to the income tax increase for couples earning $1 million or more and single filers earning $500,000 a year. But she said the Democrats needed to present about $520 million in additional spending cuts over two years.

Rell also proposed lowering the sales tax to 5.5 percent from 6 percent, starting Oct. 1. But the Democrats' plan postpones that decrease until Jan. 1, 2010, and only if state revenues do not drop.

Rell and the Democrats have agreed on: increasing the cigarette tax from $2 to $3 pack; increasing the tobacco products tax from 20 percent to 27.5 percent of the wholesale price; and imposing a three-year, 10 percent surcharge on corporate profits.

Both sides also agreed on raising state fees for a litany of professional licenses, ranging from massage therapists to daycare providers.

Democrats made some last-minute changes to the budget bill late Monday, restoring around $26 million in spending. Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, said some of the changes were made in an effort to appease Rell.

House approves bonds for '09 deficit, budget votes expected late tonight
DAY
By Ted Mann
Published on 8/31/2009

Hartford – The House of Representatives voted along party lines Monday to borrow $950 million to cover Connecticut's fiscal 2009 budget deficit, the first step toward the expected adoption later today of a new two-year budget for fiscal 2010 and 2011.

Democrats and Republicans alike, including Gov. M. Jodi Rell, have signed off on the plan to cover the remaining deficit from 2009 with borrowing, since it will enable the state to use the full $1.4 billion balance of its budgetary reserve fund to help balance the books for 2010 and 2011.

State Comptroller Nancy Wyman will close the books on fiscal year 2009, which ended June 30, tomorrow, so lawmakers were working quickly to approve bonding to cover the deficit before that deadline. A vote on the measure is expected later this evening in the Senate.

Still, Republican opposition was emphatic, as lawmakers warned that borrowing now would only add to the fiscal challenges the state will face in the future.

House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, noted that the plan approved Monday afternoon would dictate no payments toward interest or the principal amount borrowed over the next two years, followed by large annual payments in future years to pay off the debt.

“Raymour and Flanigan doesn't even have that kind of deal,” he exclaimed, during the roughly half-hour debate.

Meanwhile, lawmakers are preparing for a long night, with Democrats pushing toward a vote on a budget package that is still being negotiated — with no agreement yet in hand — with Rell and her budget advisers.

The most recent Democratic plan, which members of the House of Representatives were preparing to review in a closed-door caucus late Monday morning, would adopt Rell's offered increase on the income tax for those making $500,000 or more. But it does not include the amount of additional spending cuts — $520 million — that the governor demanded in exchange.

Republicans charged that the $385 million in spending reductions offered by Democrats in response to Rell's most recent proposal included just $185 million in real cuts, with the remainder only loosely defined, including scheduled “lapses” of unspent funds in various state agencies and accounts.

And Democrats also object to some of the tax cuts Rell included to sweeten her proposed increases, especially the governor's proposal to eliminate the state inheritance tax on estates valued at $2 million or more. The Democratic bill would not eliminate the tax, as Rell proposed, but instead raise the threshold at which it is assessed to $3.5 million. The Democrats' plan would lower the marginal rate of the estate tax.

And the Democrats would delay Rell's proposed cut in the sales tax until January of next year, with triggers that would cancel the tax cut entirely if state revenues continue to drop.

“There haven't been handshakes, but we've been talking to each other, and some things they've wanted we've incorporated,” said House Speaker Christopher Donovan, D-Meriden, on Monday morning.

Donovan conceded that, after months of jockeying and negotiating for leverage among the Democratic majorities in the General Assembly and the governor's office, there was still no assurance that the latest budget bill will become law.

“I would be thrilled if she said it's a deal,” he said. “But she's considering it, and we're looking to pass it.”

Republicans were disdainful, however, even as the party's legislative leaders conceded that they are not sure if Rell would be willing to let the bill become law without her signature.

“My understanding is there is no agreement between Democrats and the governor,” said Cafero, adding that the majority continue to resist cutting spending as far as Rell asked.

“It's more of the same,” Cafero said. “It's their refusal to compromise. What really bothers me is there's no sense of urgency here. I came in this morning and (heard) that the Senate Democrats are going to have a dinner caucus. I mean, are you kidding me? It's August 31, we don't have a budget, and you're going to have a dinner caucus to discuss the matter? I mean, it's shameful.”

Also raising hackles in the governor's office and among Republicans were some provisions of the Democratic bill that would reduce Rell's authority to unilaterally cut funding to certain agencies of the legislative and judicial branches of government.

And the bill, even as it tries to wrestle the state's projected $8.5 billion two-year deficit under control, continues to spend.

For instance, an existing state statute called for the state to stop paying meal allowances to non-union employees of the Department of Public Safety on April 1. Buried deep in the language of the Democrats' budget bill is a provision that strikes that existing language from the law, and replaces it with the following sentence: “A meal allowance shall be maintained for state police personnel at the expense of the state.”

Still, some Democratic lawmakers say the criticism that they have been unwilling to make meaningful cuts overlooks the effect of further reductions to social programs, universities and caregivers.

“We are cut out,” said Rep. Ernest Hewett, D-New London. “People are suffering already. We make any more cuts in these programs in the state of Connecticut, of course they're not going to feel it — the millionaires are not going to feel it. We feel it in New London.

“You can't cut your way out of this,” he added. “You're going to have to raise some taxes on someone, which is the people that can afford to pay. “
Rell: Yes to income tax hike, if more Dem spending cuts
DAY
By Ted Mann
Published on 8/26/2009

Hartford – Gov. M. Jodi Rell offered a compromise to legislative Democrats today, agreeing to raise income taxes on some wealthy taxpayers in exchange for roughly $520 million in state spending cuts, as the two sides struggle to end one of the longest budget stalemates in the nation.

Rell, a Republican, said she would reluctantly accept an increase on the marginal rate for individuals earning $500,000 or more annually and joint filers making $1 million or more, saying she thought that would help “achieve a breakthrough in our budget impasse.”

But at the same time, the governor renewed her criticism of and challenge to the Democratic majority, saying leaders had failed to propose “meaningful” cuts in state spending throughout months of negotiation.

And Rell also proposed tax cuts – a reduction, to 5.5 percent, in the sales tax, and the total elimination of the inheritance tax on the estates of the rich – which she said would spur economic growth and slow out-migration of affluent residents.

Democratic leaders, she said, “must cut spending.”

“Connecticut government has simply outgrown the taxpayers' ability to pay for it,” Rell said.

The compromise budget would raise a total of $710 million from new taxes, her budget advisers said, primarily through the increase in the income tax, though that total is lowered by the cuts in the sales and inheritance taxes. Rell's staff project the total amount of new revenue from her income tax hike proposal at more than $1 billion over the two years of the 2010-11 budget.

Rell's plan also would require Democrats to cut about $520 million below their most recent budget proposal, which the governor's budget chief, Robert L. Genuario, said would represent roughly the half-way point between the two sides' most recent negotiating proposals.

Democratic lawmakers were scheduled to meet in closed-door caucuses today to discuss plans for a vote on a budget Thursday, which leaders said would likely go ahead with or without an agreement with Rell. It was unclear whether Rell's newest proposal would be debated in the majority caucuses.

But both Rell and the Democratic leaders have increasingly expressed concern that a new budget is necessary before September, when the confluence of major state grant obligations, including funding for cities and towns, and the state's continuing shortfall in revenue could mean curtailed services and sharp cuts to local governments.

“I am not convinced yet that we will have the revenue to pay for everything that is necessary in September,” Rell said.
Democrats promise a budget on Thursday:  But Rell says she hasn't seen promised new cuts
Stamford ADVOCATE
By Ken Dixon, STAFF WRITER
Posted: 08/25/2009 09:46:26 PM EDT
Updated: 08/26/2009 08:25:23 AM EDT

HARTFORD -- Democratic leaders on Tuesday promised to pass a budget of some kind Thursday, whether it's their own or a long-awaited compromise with Republican Gov. M. Jodi Rell.

Rell agreed that she hopes a deal can be struck by the end of the week, but she hasn't seen additional spending cuts from the House and Senate majorities.

During an event involving dozens of preschoolers whose early learning and Head Start programs may be cut under Rell's budget proposal, Senate President Pro Tempore Donald E. Williams and Speaker of the House Christopher G. Donovan said they hope to reach a deal with Rell over the next couple of days that could give Connecticut a new budget in time for Sept. 1.

"I believe we have some additional ideas that can close the budget deficit and preserve the critical services needed by our families," said Williams, D-Brooklyn, after a rally under the south portico of the Capitol.

He said Democrats, who rule the House 114-37 and the Senate 24-12, are revising their budget plans in light of recent negotiations with Rell.

Donovan and Williams said they will cut back on their plans to raise $1.8 billion in new revenue over the two-year $38 billion budget period. "It's become absolutely clear that we have moved, we are flexible, we want a budget for the state of Connecticut," Williams said.

"We expect to run a budget on Thursday," Williams said. "Obviously, we would be pleased to have the governor's support in advance.  It's possible that we will be voting on a budget on Thursday without the governor's approval, but a budget that we would hope the governor would sign."

"We would certainly like the governor's input for what we run on Thursday," Donovan said.

Chris Cooper, Rell's Capitol spokesman, said Tuesday Rell has not seen new budget cuts from Democrats.

"The governor continues to believe we need to get a budget in place as soon as possible," Cooper told reporters in the Capitol Press Room about 5 p.m. --If these cuts are real that would be some progress."

He added Rell continues to prepare an executive order to keep state government functioning if there is no budget deal by the end of the month.  In the House, a group of moderate Democrats has offered a two-year budget with spending cuts above and beyond those endorsed by Donovan.

The preschoolers -- brought to the Capitol from as far away as New Britain, Middletown and Bristol -- held balloons and made a colorful backdrop for the latest in a series of public-relations events by Democrats who have been trying to underscore the harm represented by Rell's proposed cuts.

Eileen Costello, school readiness coordinator for the city of Danbury, said in an interview that Rell's executive orders that have kept state government functioning when the new fiscal year started on July 1 hurt her program. "We received notice on Aug. 14 that the cut was retroactive to July 1," Costello said.

She's coping with a $50,000 cut and a 600-family waiting list and for many families, if there's no child care, an adult has to stay home to care for children and not bring income home.

"If we can't find a place for their kids, they can't go to work," Costello said.

Catia Monaco, social service manager for the Danbury Head Start program, said in an interview that the whole budget stalemate in Hartford is causing uncertainty among hundreds of parents.

"We're already feeling the cuts, with lots of kids awaiting the full-day slots," said Monaco, adding Rell's current budget cuts have closed up 11 positions for kids. "If the kids can't find slots, they may not be able to compete in school later."

Rell stands firm in not raising taxes
Stamford ADVOCATE
By Ken Dixon, STAFF WRITER
Posted: 08/21/2009 09:55:18 PM EDT
Updated: 08/22/2009 08:22:14 AM EDT

HARTFORD -- Gov. M. Jodi Rell says she's fighting for Connecticut families by refusing a Democratic proposal to raise taxes by $1.8 billion at a time when the state should be cutting its budget to meet a $2-billion shortfall in revenue.

During an interview Friday, the Republican governor said she's not sure how much longer the budget impasse will continue, but she won't agree to Democratic plans at a time when the state should create a climate to save existing jobs and create new ones.

As the state budget battle was poised to eclipse the record of 1991 on Saturday -- when lawmakers finally approved the personal income tax on Aug. 22 of that year -- Speaker of the House Christopher Donovan and other Democrats on Friday warned that Rell's proposed spending cuts are Draconian and will hurt the needy.

The Democrat's higher income-tax rates -- an extra $20 a week from joint income filers who make $600,000 a year -- are a small price to pay to continue the state's social spending, Donovan said.

Rell, speaking with three reporters in her Capitol office, denied Democratic charges that she's defending the state's wealthy by opposing the Democrats' higher tax rates. She said all 1.4 million tax filers in the state would be affected by higher spending and borrowing that would increase the state's debt.

"Who do you think is paying that debt service?" Rell said. "It's not just about taxes and it's not just about any one particular tax and that's been the fallacy. It's about cutting spending."

Rell, looking tired and sitting at a table with a calculator, a BlackBerry and some budget statistics, said she doesn't know when, or if, a deal can be reached. She's preparing another executive order to keep government functioning if Sept. 1 arrives without a deal.

"I don't relish this fight, but it is a fight worth having because it is a fight I believe for the people of the state of Connecticut and the families of the state," she said.

She said she wants a new budget as much as anyone, but she won't agree to a deal just to finish the controversy.

"It has to be something that's good for our state, won't kill jobs, won't force people out of our state and cuts spending and puts us in a favorable position when the economy turns around," Rell said.

Budget talks headed nowhere
DAY
By Karin Crompton
Published on 8/14/2009

After a flurry of somewhat noisy activity last week and quieter talks Monday and Tuesday, legislative leaders and Gov. M. Jodi Rell are ending the week with relative inaction on the state budget.

There were no talks Wednesday and Thursday, and none were scheduled for today.

Rell's budget director, Robert Genuario, met with the nonpartisan Office of Fiscal Analysis Thursday afternoon, according to the governor's office, in preparation for upcoming negotiations. The governor wasn't a part of the meeting.

But that wasn't good enough, according to Senate President Donald Williams, D-Brooklyn.

”We waited the entire month of July with those types of logistical steps and it really didn't get us anywhere,” Williams said in a phone interview Thursday. “I think we have the makings of a budget deal on the table; we just need to press forward and get it done. I'm available 24/7 and so is the speaker (House Speaker Christopher Donovan).”

Democrats met with Rell Monday and Tuesday and were having staff-level meetings Wednesday and Thursday, according to Williams, who said he didn't know when the next face-to-face with the governor would be.

Williams said the two sides have “closed about 85 to 90 percent of the problem,” referring to Democrats and Rell closing the gap on their two proposed budgets.

Rell has proposed a $36.9 billion two-year plan, while the Democrats offered a $37.8 billion budget; the Republicans' proposal was $36.4 billion.

The governor's office Thursday said only that “meetings continue” and could not confirm when Rell would meet again with legislative leaders.

Connecticut is one of just two states in the country without a budget; Pennsylvania is the other.

According to an Associated Press story, Rell called Pennsylvania governor Ed Rendell Monday to commiserate about being the last two states to pass budgets for the current fiscal year, and jokingly warned Rendell not to sign a budget before she does.

Income tax hike blocking budget;  Battle waged over effects of increase
Stamford ADVOCATE
By Ken Dixon, STAFF WRITER
Posted: 08/08/2009 09:18:48 PM EDT
Updated: 08/09/2009 12:03:49 AM EDT

HARTFORD -- For a solution to the state budget impasse, lawmakers -- and the voters who elect them -- are arguing whether a couple earning $600,000 a year should pay another $20 a week in income taxes for the benefits of living in Connecticut.

In a nutshell, it's the obstacle that's on the verge of giving Connecticut the dubious distinction of being one of only two states without a new budget.

Republican Gov. M. Jodi Rell and GOP legislators, who are a 37-114 minority in the House of Representatives and 12-24 in the Senate, said that raising income taxes in the recession will result in the exodus of wealthy residents, particularly in southwestern Connecticut's Gold Coast enclaves.

Where would they go? Florida has no income tax, and Republican lawmakers said it could become the destination of choice for wealthy Connecticut residents who don't want to pay more than the current 5 percent income tax rate.

But other nearby states with proximity to New York City have top tax rates much higher than those proposed by Connecticut's legislative Democrats.

Majority Democrats here said they believe that higher taxes on the rich will create the kind of assured flow of revenue that the state is going to need in the future, especially in two years, when federal stimulus money is gone, along with Connecticut's $1.4 billion in emergency reserves.

Unfortunately for Democrats, Senate leaders are still scrambling to come up with enough support to reach the 24 needed for a potential veto override should Rell reject them.

The battle, which has been raging in one form or another since Rell offered in February a two-year, $38.4 billion budget that was $2 billion in deficit, is threatening to make Connecticut -- in some surveys the nation's richest state per capita -- possibly the last state to approve a budget this year.

On Wednesday, lawmakers in North Carolina, a state of 9.2 million residents, approved a one-year, $19 billion budget with $1 billion in new taxes that the governor said she'd sign. That leaves Pennsylvania and Connecticut. Connecticut has about 3.3 million residents and nearly the same amount of state spending.

Even the dysfunctional New York State Assembly, which was the site of an

intraparty mutiny this spring that shut down action in the state Senate, was able to cobble together a newstate Senate, was able to cobble together a new budget, which raised its top tax bracket to nearly 9 percent.

Connecticut Democrats want to raise the marginal income tax rate, from the current 5 percent to 6 percent on joint incomes more than $500,000; 6.5 percent on those more than $600,000; and 7 percent on incomes more than $750,000.

The partisan battle over the income tax is the last piece of the puzzle. Rell and Democrats, to various extents, have agreed to add a surcharge on corporate income taxes and to raises taxes on cigarettes.

But the difference between Rell's plan to raise taxes by $391 million and Democratic proposals to raise them by $1.8 billion is the main obstacle.

"I think everyone has to pay their fair share," said state Rep. Christopher L. Caruso, D-Bridgeport, the longest-serving member of the city's legislative delegation.

"Over the years, the wealthiest have benefited by not having to do that," Caruso said in a phone interview. He said that in the wheeling and dealing to gain a majority for the creation of the income tax back in 1991, lawmakers agreed to sharply reduce the capital gains tax to attract support from Gold Coast lawmakers.

"For all these years, the wealthiest have done very well, but it meant less funds for the state," Caruso said. "Now we're in tough times, so the wealthiest have to step up, so those among the poorest aren't the most affected."

The couple making $12,000 a week -- $600,000 a year -- can easily afford an extra $20 a week, 35 percent of which could be deducted from federal income tax, Caruso said.

A recent Quinnipiac University Poll found that state voters, by a two-to-one margin, prefer cutting services to raising taxes.

However, 71 percent approved raising the income rate on couples who make $500,000 a year.

The Quinnipiac Poll also indicated that by 55 percent to 42 percent, voters reject the premise that raising taxes will lead to the migration of the wealthy out of the state.

According to the nonprofit National Conference of State Legislatures, nine states, most notably California and New York, increased income taxes this year, while 10 cut them.

The state Department of Revenue services said last week that among all tax filers in 2007, including singles and couples, there were 15,746 tax returns submitted that reported incomes of $350,000 to $500,000.

There were 15,536 returns for incomes of $500,000 to $1 million dollars; 6,483 for incomes of $1 million to $2 million; and 5,256 returns filed for incomes in excess of $ $2 million.

Senate Minority Leader John McKinney, R-Fairfield, said last week that Connecticut has the opportunity to use its lower taxes to make the state more attractive.

"As a general matter, I think raising taxes in an economic recession is bad policy because it's harmful to job-growth creation, and it hurts the economy," he said.

McKinney pointed to commercial vacancy rates of 25 percent in Stamford and 19 percent in Greenwich as potential competitive weapons in the region competition for new tenants.

"We have an opportunity to reverse the migration we've seen and actually attract people to Connecticut rather than New York, Massachusetts, New Jersey and Rhode Island, where there are significant taxes," McKinney said. "If we can hold the line on higher taxes, the tax differential will attract more people to Connecticut, and we could end up with more jobs, more taxpayers and more revenue without raising the tax rates."

Top income tax rates Connecticut: 5 percent, New Jersey 10.75, a temporary one-year raise over the current top rate of 8.97 percent, Rhode Island: 9.9 percent, Vermont: 9.5 percent, New York: 8.97 percent, North Carolina: 7.75 percent, California: 10.55 percent.
Budget Talks Show No Progress
DAY
By Karin Crompton
Published on 8/5/2009

Hartford - Legislative leaders met with Gov. M. Jodi Rell at the governor's mansion Tuesday morning for a short, closed-door budget discussion that appeared to be little more than ceremonial.

The two sides are stalled on the same issues, said Democratic spokesman Derek Slap, pointing to the majority party's insistence on closing the gap by hiking taxes on the wealthy and the governor's overall resistance to most tax increases.

Rell proposes increased levies on cigarettes, alcohol and businesses last week but is also seeking heavy spending cuts that the Democrats have portrayed as harmful to the poor and middle class.

”The big sticking point is still, from our perspective, will the budget be balanced on the backs of the middle class?” said Slap, who said Tuesday's meeting lasted less than two hours. “The taxes that the governor proposes are on the middle class and working families and the cuts she proposes, you could say the same thing.”

Slap said leadership of both parties will hold smaller, “breakaway” meetings this week to work toward a compromise and that they will likely resume talks at the governor's residence “by Monday at the latest.”

Rell spokesman Rich Harris declined to comment on Tuesday's meeting and its substance.

Rell's latest budget proposal, introduced Thursday, increases taxes by $391 million by focusing on alcohol and tobacco taxes plus a three-year, 10-percent corporate tax surcharge. Rell said her two-year, $36.9 billion plan will not include other tax increases.

Democrats last week cut just over $216 million in spending from their previous budget plan and scaled back proposed tax increases in their $37.8 billion package. Their budget package raises taxes by $1.8 billion and includes higher income taxes for wealthier taxpayers.

The governor is running the state by emergency executive order, issuing monthlong orders that allocate funds for state operations in July and August.

On Sept. 1, state comptroller Nancy Wyman will certify the $900 million 2009 budget deficit; if there is no budget deal and the state hasn't bonded to cover the deficit, the funds will automatically come out of the rainy day fund to close the state's books

States in Distress
Editorial - NYTIMES
August 4, 2009

By now, most states have balanced their budgets for the fiscal year that began on July 1. To do so, they had to fill the deepest budget holes in modern memory — shortfalls totaling nearly $143 billion.

Yet, their problems are far from over. Already 10 states and the District of Columbia are coming up short for this year by $4 billion. And 33 states currently foresee deficits for next year, mainly because high unemployment is expected to depress tax revenues even as it increases demand for state aid. The coming deficits — estimated at $160 billion to $180 billion — are likely even if economic growth resumes, because hiring is not expected to pick up until well into a recovery.

Continued fiscal stress on the states will severely impair Americans’ ability to withstand the downturn. Both state officials and the Obama administration must prepare now for a situation that is bound to get worse before it gets better.

In general, this year’s budget gaps were closed with federal stimulus dollars, state rainy-day funds, spending cuts, tax increases and one-time accounting maneuvers.

For next year, roughly $40 billion in federal stimulus will be available for state fiscal relief. But the states’ own emergency funds will be largely depleted and, obviously, one-time fixes will be tapped out. Spending cuts on the scale of those enacted this year would be brutalizing. Cuts have already fallen heavily on services for low-income families, the elderly and the disabled, on early education and child care, and on public schools, colleges and universities. Most states also have cut their public work forces, impeding access to services and harming the economy by reducing income and consumer spending.

Ever deeper spending cuts risk long-term damage to institutions like social service agencies, school, health care networks, parks and cultural forums. As employees leave and downsizing, neglect and disrepair become the norm, it gets increasingly difficult to rebuild.

That leaves two main ways to fill the anticipated gaps: More federal stimulus in the form of direct fiscal aid to states and more state tax increases. The administration has said that talk of more stimulus is premature. Politically, that’s probably true. Congress has its hands full with health care reform and other issues. Current stimulus spending also will deliver its biggest punch in the next few months, so administration officials may prefer to wait until they can quantify those effects before asking for more. But there’s virtually no doubt that more will be needed. Obama officials must ensure that they are not putting themselves into a position where asking for more stimulus later is perceived as a policy reversal.

States cannot avoid raising taxes to help balance their budgets. Both tax increases and spending cuts are bad in a downturn because they lower demand. But tax increases on high-income residents are less harmful than spending cuts; wealthier taxpayers tend to pay higher taxes from savings, not money they would otherwise spend. That said, states will have a harder time raising taxes if health care reform includes higher federal taxes, which would make the need for more stimulus greater.

There are no cheap, easy or fast ways out of the Great Recession. Political leadership is crucial to ensure that fiscal fixes are both fair and adequate.

Ahah!  maybe one taxpayer can help with the "millionaires" tax?
Westport Firm at Center of Latest Wall Street Pay Controversy
WestportNow.com
Posted 08/03 at 12:30 AM

Westport once again is gaining notoriety for a financier and firm involved in a Wall Street bailout and pay-for-performance controversy.

This time it is Andrew Hall, the British-born trader behind Phibro LLC, the energy trading arm of bleaguered bank Citigroup. Phibro is housed in the sprawling Nyala Farm office complex on Greens Farms Road, which some reports have simply called a “former dairy farm.”

According to some accounts, Hall is in line for a $100 million payout tied to oil trading profits he made for his firm.

Back in March, there was a similar controversy surrounding Westporter Joseph J. Cassano.(See WestportNow March 18, 2009) He headed the money-losing financial unit of American International Group, the insurance company which paid millions in bonuses after a $170 billion government bailout.

The New York Times reported Sunday that Hall, who lives in the Southport section of Fairfield, is quietly pushing for a “quiet divorce” from his parent company and has had preliminary talks with one possible suitor.

Citigroup said in a statement, “We are evaluating the best way forward for our stakeholders.” A company spokeswoman declined to comment specifically on the talks referred to in the Times’ story.

Phibro has been in the spotlight after the White House criticized a reported $100 million pay plan for Hall as “out of whack.”

Citigroup said in its statement that the Phibro unit operates under a pay-for-performance contract, with compensation determined at the end of the year as a percentage of the profits the business earns for Citi.

“We’re confident in the value these types of profit-sharing arrangements bring to the company and its shareholders as they directly align compensation with performance and include appropriate clawback and risk-sharing provisions,” Citigroup said.

It has previously been reported that Hall, a trader known for huge long-term bets in the oil market, has been pressing Citi to honor the 2009 pay package.

The Phibro unit can sometimes provide the bulk of revenues for its parent company, which has taken a $45 billion federal bailout and is expected this week to give the government a 34 percent equity stake.

Citigroup, which has seen many of its star traders defect to rival banks, is keen to maintain Hall as he provides one of its most profitable revenue streams.
Harmony on deficit forecast: It's $8.558B
DAY
By Ted Mann
Published on 7/25/2009

Democratic leaders and Republican Gov. M. Jodi Rell will each unveil new budget proposals next week, spokesmen said Friday, now that analysts for both sides have agreed on an estimate for the 2010-11 deficit.

The updated budget documents come not as evidence of a breakthrough in the ongoing deliberations over a new biennial budget, which have now dragged on nearly a month into the new fiscal year.  Instead, the two sides will adjust their respective spending and tax proposals after the announcement Friday afternoon that the legislature's Office of Fiscal Analysis and Rell's budget office, the Office of Policy and Management, now project the same cumulative shortfall for two-year budget period: $8.558 billion.

The two offices had produced significantly different deficit estimates this spring, with Rell and her advisers anticipating a shortfall fully $2 billion smaller than that projected by Democrats and OFA.

Even as those projections grew closer together over several months, Democrats and the governor continued to spar over their respective estimates, eventually prodding the legislators to pass a bill requiring the two offices to reach consensus. Under the law, which Rell vetoed only to be overridden last week by the legislature, Comptroller Nancy Wyman would have issued a deciding ruling in the event OFA and OPM could not come to an agreement.

In a statement, Senate President Donald E. Williams Jr., D-Brooklyn, said the Democrats' revenue forecasting bill, despite being dismissed as a power grab by some in the Republican minority and in Rell's office, had finally forced the divergent sides to strike an agreement on the size of the state's budget hole.

”This happened as a direct result of the consensus revenue forecasting bill that the legislature re-passed earlier this week,” Williams said. “We went through the entire legislative session without agreement on the fundamental issue of the size of the deficit. It is unfortunate that this is happening at the end of July when it should have happened in February.”

Meanwhile, Rell will prepare to present a new budget package next week that “focuses on spending cuts and shrinking the size of state government,” said Donna Tommelleo, a Rell spokeswoman. “She looks forward to working with legislators to present the citizens of Connecticut with a budget for a state government that they can afford now and in the future.”

”This gives us a real chance for agreement,” House Speaker Christopher Donovan, D-Meriden, said in a written statement. “Each party will put their best proposal out there, in full view of the public and with no more debate about the size of the deficit. Then everyone can understand where we are in agreement, where we differ, and we can negotiate the best solutions to resolve those differences.”

Under the terms of the revenue forecasting law, both sides will be required to modify their budget proposals by Thursday, 10 days after the effective date of the new law.

But that doesn't mean the two sides have come closer together in their dispute over whether to raise taxes or embrace further spending cuts to close the budget gap, warned some participants in budget talks, which have progressed largely out of public view.

”Without breaching the terms of the blackout, I'm not so sure that following the law that frankly I find to be unnecessary and counterproductive should be viewed as making progress,” said House Minority Leader Lawrence F. Cafero Jr., R-Norwalk. “This is just the legislature and the governor following a new law.” .
Amid budget dithering, a firm deadline emerges
DAY
By Ted Mann
Published on 7/24/2009

Officially, state Comptroller Nancy Wyman was only offering a helpful reminder Thursday when she announced to state lawmakers and Gov. M. Jodi Rell that she planned to close the books for Connecticut's 2009 fiscal year on Sept. 1.

But if open letters are gestures in politics, the Democratic comptroller might as well have been tapping her wristwatch, alerting obstinate budget negotiators to a serious and hastening deadline.

When Wyman closes the 2009 books, she reminded the lawmakers, she will also certify the state's 2009 deficit, now projected to top $900 million. And without a new budget in place, state law requires that the deficit immediately be paid off, out of the state's budget reserve, or “Rainy Day” fund.

And that, for negotiators on both sides of the budget stalemate, could prove disastrous.

Despite disagreement in other areas, lawmakers and Rell administration officials have all seemed in agreement on a plan to issue bonds to cover the 2009 deficit, which would enable them to use all of the roughly $1.4 billion in the Rainy Day fund to balance the budget in 2010-11.

The cumulative deficit over those years has been projected at nearly $9 billion.

An automatic transfer of funds to cover the '09 deficit would deprive lawmakers and Rell of a huge chunk of cash they have anticipated using to help bring their various budget proposals into balance.  That means that Wyman's announcement may have finally given state budget talks the one thing they have seemed to lack: a zero-hour, a deadline grave enough to drive the ideologically divided negotiators to strike a deal.

”I thought it was good for the comptroller to remind us that if we don't have a budget agreement in place and ideally a budget passed by then that there's a risk of losing the opportunity to bond ... the remaining deficit,” said Senate President Donald E. Williams Jr., D-Brooklyn, in a telephone interview.

”That could throw off plans that everyone has in terms of using that tool to balance the budget in 2010 and '11.”

”I think it serves as a good reminder that there are unfortunate consequences the longer we go without a budget,” Williams added, “so I hope it inspires all of us, all of the participants, to try to get an agreement sooner rather than later.”

Like other participants in the budget talks, which have included legislative leaders from both parties, the governor and her high-level staff, Williams declined to share details of the budget proposals being discussed in the occasional meetings at the governor's residence in Hartford.  The sporadic talks have unfolded in a virtual news blackout since July 1, when the new fiscal year began without a budget in place, obliging Rell to issue executive orders to maintain state operations on a monthly basis.

A new executive order authorizing spending through August is anticipated next week.

Wyman's letter also included stern warnings about the proposed use of one-time infusions of revenue to balance the 2010-11 budget, which the comptroller noted have been part of all of the competing proposals offered by Democratic and Republican legislators and Rell's budget staff.  The one-time revenues contemplated for use include federal economic stimulus funds, direct borrowing and “securitization” of streams of existing revenue, including lottery ticket sales and energy fund accounts.

”While I acknowledge that the severity of this downturn has forced the state to seek extraordinary means to raise revenue, the magnitude of one-time revenue contained in current biennium budget proposals is both dramatic and highly questionable,” Wyman wrote.

The budget proposals under debate so far have proposed a minimum of $1.5 billion in one-time revenue in fiscal 2010 alone, Wyman noted, and all would likely leave a shortfall of at least $2.5 billion at the end of the biennium, in June 2011 - a structural hole that the legislature will then have to close with tax increases or significant spending cuts.

”Every dollar of one-time revenue that is relied upon to force the budget into balance decreases the likelihood that economic growth alone will be sufficient to resolve this enormous structural imbalance,” Wyman warned, calling for a more “balanced” approach of further spending cuts and tax increases to avoid dependence on borrowing.

But Williams and other legislators said greater dependence on temporary infusions of revenue would be unavoidable, given the historic scale of Connecticut's budget shortfall.

”I think that she's right, in the sense that there is a greater dependence on one-time revenue, but the difference between 2002 and 2009 is the extra depth of the deficit this year,” he said.

”Those one-time funds are there for this one-time crisis. ... No one believes that there's going to be some magical solution that's going to turn some things around tomorrow.”
State Budget Talks Continue Behind Closed Doors
The Hartford Courant
By CHRISTOPHER KEATING
July 10, 2009

For more than four months, Republican Gov. M. Jodi Rell and Democratic legislators clashed over the state budget constantly — questioning deficit projections, battling over raising taxes, and wrangling over how deeply to cut social programs.

The rhetoric was high-pitched, reaching a crescendo when Rell declared she would veto the budget written by the Democrats and approved in both the House and the Senate. That move sent top Democrats to the roof of Hartford Hospital to stand in front of a Life Star medical helicopter to dramatize Rell's plan to cut the state's subsidy for the chopper.

Then, on June 28, the talks moved inside the governor's mansion in Hartford's West End, and the squabbling has been replaced by near-total silence.

For nearly two weeks, both sides have repeatedly refused to discuss the details of the ongoing negotiations because they agreed to a confidentiality pact when the talks began.

"We're making progress," said Sen. Dan Debicella, the ranking Senate Republican on the budget-writing committee. "Everybody is going to have to make a compromise — given that [Democrats] control two-thirds of the legislature and the governor has the veto pen. We're trying to find the common ground."

Citing the agreement, Debicella declined to provide precise details of the talks. But he said that some type of compromise is inevitable because Rell offered a budget with no tax increases and the Democrats responded by passing a bill with $2.5 billion in tax increases.

The high-stakes negotiations are crucial because the state is facing its worst fiscal crisis in decades and is trying to close a projected deficit of $8.85 billion over the next two fiscal years. The last time budget talks dragged out this long was in 2003 — when the final deal wasn't settled until August.

The two sides have met on five separate days for about 40 hours of bipartisan talks, according to three people with knowledge of the negotiations. The last meeting was Tuesday, and the talks are scheduled to resume Monday at the governor's mansion — a convenient site that is away from the spotlight of the Capitol and inquiring reporters.

After the two sides opened negotiations Sunday, talks began in earnest Monday with a session that lasted from about 9 a.m. to 6 p.m.

Not all the work goes on inside the mansion, where Rell lives part time. Lawmakers have been working on the budget daily as part of various homework assignments to prepare for the full, bipartisan talks.

The group — as many as 15 people, plus staff members — meets in the large dining room on the first floor of the governor's residence, off the main entrance. Rell has been involved directly in the talks, along with House Speaker Christopher Donovan, Senate President Pro Tem Donald Williams, state Budget Director Robert Genuario, Lt. Gov. Michael Fedele, as well as other top leaders and the co-chairs and ranking members of the legislature's budget-writing and tax-writing committees.

Genuario has been particularly tight-lipped, even declining to reveal whether the group would be meeting on a particular day.

"I am not an authorized spokesman," Genuario told reporters in the Capitol press room.

While there has been some grumbling about the lack of news coming out of the talks, some officials see no problem with the silence.

"We want a deal," said Derek Slap, a spokesman for the Senate Democrats. "We want to honor our commitments to get a deal. Getting some trust among the people in the room is a good thing."

Copyright © 2009, The Hartford Courant

THE ELEPHANT IN THE ROOM: Cafero center stage of budget negotiations
By ROBERT KOCH, Hour Staff Writer
Posted on 07/08/2009

When state lawmakers are in session, House Minority Leader Lawrence F. Cafero Jr. of Norwalk is the head of the House Republican caucus.

When lawmakers fail to come up with a new state budget, as is now the case, he is among a handful of legislative leaders meeting behind closed doors in search of a compromise.

"Right now, (the budget) is the only business before us," said Cafero, R-142, now in his ninth term. "First, you've got to agree on your target. There's the disagreement on the amount. Then you start with those things we do agree on. What you want to do is narrow down the issues of disagreement. It's a process."

As House Republican leader, Cafero schedules caucuses, names ranking members on committees, develops the caucus legislative package, keeps an eye out for candidates for recruitment to run for public office, and deals with the governor's office on a day-to-day basis.

And lately, he's at the center of budget negotiations.

Cafero, an attorney, estimates that he spent 60 hours last week in closed-door budget negotiations with Republican Gov. M. Jodi Rell, House Speaker Christopher G. Donovan, D-Meriden; Senate President Donald E. Williams Jr., D-Brooklyn; House Majority Leader Martin Looney, D-New Haven; and state budget director Robert L. Genuario of Norwalk.

The budget negotiations generally start in the morning and run until late afternoon or into the evening. The negotiations are delicate, to say the least.

Donovan was unable to comment about Cafero's role in the process "due to the media blackout imposed by the legislative leaders and Rell while budget negotiations are ongoing," said a spokesman.

Other lawmakers from both sides of the aisle, however, commented on what it's like working with Cafero on budgets and other issues during regular and special legislative sessions. They say Cafero holds firmly and passionately to his positions.

State Sen. Toni Boucher, R-26, who worked with Cafero for 12 years when she was a state representative, describes him as a mentor with a gregarious personality. Cafero's work, as minority leader, entails asking fellow Republican for their opinions on issues and "finding out what the concerns are." The concerns and case are then brought to the other side of the aisle, and it usually involves a personal story, according to Boucher.

"He'll take a big issue, or a small issue, and he'll illustrate it to everybody through a story or an experience," Boucher said. "When he gets up and explains how negative those taxes would be I think it did move quite a number of people on the other side of the table."

Late last month, state lawmakers approved the Democrats' $35.7 billion biennial budget. Rell vetoed the bill, launching the closed-door negotiations among legislative leaders.

State Sen. Bob Duff, D-25, said Cafero has given the 37 Republicans in the House "a very loud voice." Partisanship is part of the job.

"That's part of his role as leader of his caucus, to have partisan views. It comes with the territory," Duff said. "I have no problems working with Larry. We've both had similar experiences. We were both raised in town, we graduated from the public schools."

State Sen. Andrew J. McDonald, D-27, said Cafero "reset the tables" several years ago by presenting a budget that called for fewer taxes than the spending plan put forward by Rell.

"He engineered an alternative budget that shifted the paradigm of the negotiations," McDonald said. "He obviously didn't get everything he wanted, but it reset the tables."
Rell, Lawmakers Agree To Meet On State Budget
By SUSAN HAIGH, Associated Press Writer
June 27, 2009

NEWINGTON

Gov. M. Jodi Rell and legislative leaders have agreed to meet Sunday at the governor's residence and attempt to hammer out a budget deal, possibly before the fiscal year ends Tuesday.

There have been no formal talks between Democrats and Republicans since the General Assembly adjourned on June 3. Rell and the General Assembly have been at odds for months over how to cover a massive budget deficit, estimated to be as high as $8.8 billion over the next two fiscal years beginning July 1.

Despite the decision to meet, there's no guarantee they will reach a compromise.

On Saturday, Rell made it clear she does not like the direction that Democrats have been taking with their tax and spending plans. Appearing at Phillip and Sarah Bucchi's kitchen in Newington, Rell signed her impending veto of the Democrats' two-year budget, which was passed on Friday.

She did not date the document, so her veto won't be official until she receives the budget bill, possibly on Monday.

"It is quite simply unbalanced, unaffordable and unfinished," said Rell, who criticized the two-year, approximately $37 billion proposal for raising state taxes and fees by $2.5 billion and lacking what she considers "real spending cuts."

Democrats, however, maintain the plan is a good blueprint and preserves many key state services and programs, such as funding for nursing homes.

Even though the Bucchis -- a teacher and a stay-at-home mother -- won't be affected by the Democrats' plan to raise income tax rates on higher income earners, Rell said the proposal will still hurt the middle class because it does not reduce the size and cost of government and will ultimately lead to more red ink and higher taxes.

In her veto message, Rell said the "abject failure" of the Democrats' budget is that it does not reduce state spending in any meaningful way.

The two top Democratic leaders held a counter event Saturday at the Life Star emergency medical helicopter landing pad at Hartford Hospital. Some funding for Life Star was cut in Rell's original February budget and Democrats have held a series of appearances highlighting those types of reductions in recent weeks.

"As we begin earnest negotiations with the governor, starting tomorrow, one of the things that we're going to be fighting for are the critical services that in many cases save lives in the state of Connecticut," said Senate President Donald E. Williams Jr., D- Brooklyn, pointing out how the Democrats' budget restored funding for Life Star.

Williams maintains that Democrats and Rell are not far from reaching a deal.

"My optimism comes from my hope that when folks get in the room, we have the governor in the room, the legislative leadership in the room, that we will check the politics and the rhetoric at the door and we will get down to the business of getting a complete and responsible budget for the people of Connecticut."

If both sides don't reach an agreement by Tuesday, that means no budget will be in place for the new fiscal year beginning July 1 and Rell will likely have to run the state by executive order, choosing which bills to pay.

House Speaker Christopher Donovan, D- Meriden, said the smoothness of that process will likely depend on how well budget negotiations go over the coming days.

"My hope is that when we get together tomorrow, there will be a beginning of us working together, and in that case, should the deadline pass -- and I hope it doesn't -- but if it should pass, I hope we work together on what the next step is."
Rell says she will veto budget bill 
DAY
Published on 6/27/2009

Governor M. Jodi Rell announced today she will veto upon receipt the legislative Democrats’ budget bill that passed the state Senate on Thursday and the House of Representatives on Friday.

“The flaws and failures of the tax and spending proposals contained in the Democrats’ budget are obvious and they are a recipe for disaster,” Rell said in a statement issued late Saturday morning. “It is neither balanced nor remotely realistic in its assumed ‘savings’ and ‘spending cuts.’"

Rell said the budget “does nothing to reduce the size of a government that has outgrown the taxpayers’ ability to pay for it. By not reducing the size or cost of state government now, the Democrats’ budget sets the stage for further – and larger – deficits in the years to come.”

Rell said there is still time to develop a budget before midnight Tuesday and she called for legislative leaders to meet with her Sunday afternoon at the Executive Residence to work on a budget.

At the same time, the governor said, she is preparing an executive order to run the state government in a new budget’s absence.

Towns Worried About Getting State Aid If Budget Impasse Continues
The Hartford Courant
By DON STACOM
June 27, 2009

HARTFORD —

Connecticut towns are banking on getting millions of dollars in state aid payments when the new fiscal year starts Wednesday, but what happens if the state has no budget by then?

Gov. M. Jodi Rell says she'll use emergency powers to make necessary payments — including state payrolls — to keep Connecticut's government operating, regardless of a budget impasse. Beyond that, though, spending will be at her discretion.

"Anything that, by law, must be paid will be paid," Rell spokesman Rich Harris said Thursday.

Rell's staff declined to say exactly what she'd consider legally necessary, so theoretically payments to local school systems, town governments and nonprofit agencies might not make the cut.

"At this point, the governor doesn't want to discuss theoreticals," Harris said. "If it comes to that, we'll address those issues. But we're still hoping to have a responsible, affordable budget by July 1."

The first state-aid payments to towns are due on July 1 to pay for millions of dollars of road repairs; those grants represent major income for rural towns with small tax bases but plenty of highways to maintain. James Finley Jr., executive director of the Connecticut Conference of Municipalities, said it's essential that towns get paid on time because they're operating on tight cash flows with little room to maneuver.

"In this economy, they're handicapped because they've tapped their reserve funds, their investment income is practically nil and it's tough to go into the bond market," Finley said.

He said Rell's staff has informally assured him that municipal aid will qualify as "essential" if she must issue week-by-week spending orders.

There is no threat of a government shutdown this year, and it appears that Rell has the upper hand — at least in the short term — if the impasse with the Democratic General Assembly goes past Tuesday night, when the current budget expires. Attorney General Richard Blumenthal concluded during a protracted budget stalemate in 2003 that governors have legal authority to temporarily run the state's expenses by executive order, with wide latitude to decide what money must be spent and what expenses may be deferred.

Democratic lawmakers in 2003 balked, publicly complaining that then-Gov. John G. Rowland was deliberately shortchanging nonprofit mental health agencies and social services as he doled out his weekly payments. In late July of that year, he infuriated Democrats by announcing a 48-week executive spending order — effectively giving him one-man control of all state spending for the year until lawmakers adopted a new budget. The next day, lawmakers worked out a deal, and by mid-August the state had a new budget.

Blumenthal's staff said Thursday that the attorney general's legal opinion from 2003 still stands, and Rell's staff has cited it when announcing her preparations for an executive order to take effect Wednesday.

Copyright © 2009, The Hartford Courant
READ more here (on our "list of bills" subpage)...which Senator didn't vote?  Senator Len Fasano (R.) from towns around New Haven...which Majority Party Senators voted "no?"
Senate Approves Income, Cigarette, Estate, Biz Tax Hikes
Hartford Courant
By Christopher Keating on June 25, 2009 4:51 PM

After months of deliberations, the state Senate voted Thursday to raise the income, cigarette, estate, and corporate profits taxes in an attempt to close the state's growing budget deficit over the next two fiscal years.

Through a combination of spending cuts and $2.5 billion in tax increases over the next two years, the bill would shrink the ever-growing deficit that has been caused by a deep recession and a collapse in stock prices on Wall Street.

After nearly three hours of debate, the Senate voted, 19 to 16, for a budget that will now go to the state House of Representatives for another vote on Friday. Although Democrats hold a veto-proof majority in both chambers, the Senate Democrats were unable to provide the necessary 24 votes that are needed to override an expected veto by Republican Gov. M. Jodi Rell.

The bill includes $1.5 billion in increased income taxes, plus about $125 million in new fee increases that are virtually the same as the fee and fine increases proposed in February by  Rell.

Rell is expected to veto the plan because she believes that the tax increases are too high. She unveiled an original plan in February and then a supplemental plan several months later that both contained no tax increases.

Five fiscally conservative Democrats voted against the budget: Robert Duff of Norwalk, Joan Hartley of Waterbury, Gayle Slossberg of Milford, Paul Doyle of Wethersfield, and Ed Meyer of Guilford.

The bill calls for raising the state income tax to 7.5 percent for couples earning more than $750,000 annually - which would be a 50 percent rate increase on the income above that level. Any couple earning less than $500,000 annually would see no change in their state income tax.

The increase is part of a multi-pronged package for a graduated income tax that Democrats have sought for nearly a decade. Currently, the maximum rate is 5 percent, but because of the complications of the tax, relatively few taxpayers in the state actually pay 5 percent now.

The Democratic plan calls for a 6 percent rate for couples earning more than $500,000 annually and individuals earning more than $265,000 annually. The rate would increase to 6.5 percent for the portion of income earned by couples over $600,000, and then the top rate of 7.5 percent would kick in for income above $750,000.

As a result, couples earning more than $750,000 would pay five different rates on various portions of their overall income: 3 percent, 5 percent, 6 percent, 6.5 percent, and 7.5 percent.

Rell opposes the tax-hike plan, and a veto is expected soon after the detailed bill reaches her desk. Rell's budget director says the tax hikes are unacceptable to Rell, but Rell herself has not yet spoken the word "veto'' regarding the latest package.

"Here we are passing a budget that the governor is not going to sign,'' said Senate Republican leader John McKinney of Fairfield. "We have been told, we have been lectured, we have been press-conferenced to death that the only honest budget is a budget that meets'' the Office of Fiscal Analysis' latest deficit estimate of $8.85 billion over the next two years. "Finally, we've moved off that, and I hope that represents progress.''

McKinney and other Republicans complained that few people had seen the details of the Democratic budget until Thursday morning - saying the plan should be open to public scrutiny for at least 24 hours in advance.

"Let the press write about it, and let the people know,'' McKinney said.

Senate President Pro Tem Donald Williams, the highest-ranking senator, said the global recession has impacted virtually every county in the world and all 50 states have had fiscal problems.

"We know that we must shrink state spending, and it has not been easy'' making cuts, Williams said. "We have found billions of dollars of savings. ... On the revenue side, no one likes to talk about taxes or tax increases. ... Yes, the wealthy should be at the table as well.''

Even with the tax hikes, Connecticut would still have lower income-tax rates than New York and Rhode Island, among others, he said.

The bill would also hike the state's cigarette tax by 75 cents per pack, pushing the rate to $2.75 per pack - tying Connecticut with New York for the highest in the nation. Rhode Island would still lead the nation at $3.46 per pack, while Connecticut prices would be far, far higher than in South Carolina - where the tax is the lowest in the nation at only 7 cents per pack.

The Democratic plan also calls for a 25 percent surcharge on the corporate profits tax for the next three years, which is lower than the original plan for a 30 percent surcharge that was approved in April by the tax-writing finance committee.

The plan also calls for a 30 percent surcharge for three years on the estate tax, which is paid by the families of those who die with more than $2 million in the estate.

On a party-line vote at about 4 p.m. Thursday, the Senate approved the revenue estimates by a vote of 24 to 11. The overall package will be about $38 billion over two years, but the bill Thursday did not include the state's separate transportation budget. Sen. Andrew McDonald, however, said the budget will not include any bus or train fare increases.

Sen. Eileen Daily, a Westbrook Democrat who co-chairs the finance committee, said that members of the state's business community had preferred the surcharge to other forms of taxation.

"In meeting after meeting after meeting, this is what the business community asked us to do,'' Daily told members of the finance committee on Thursday.

"Business leaders, small and large ... wanted to do their part,'' Daily said later on the Senate floor. "They said the best way for us to do it was to tax their profits'' rather than taxing their ability to make a profit.

But CBIA, the state's largest business lobby and a constant presence at the state Capitol for months, has never publicly endorsed the tax plan.

Sen. Toni Boucher, a Wilton Republican, said the changes in the income and estate taxes represent "one of the biggest tax policy changes since 1991.''

"We may be acting too hastily, I believe,'' Boucher said.

On the Senate floor, the budget debate started at about 1:45 p.m. with the document being explained by Sen. Toni Harp, a New Haven Democrat who co-chairs the budget-writing appropriations committee. The Democratic plan is $97 million below the governor's initial submission for the first-year of the two-year budget, she said.

The Democratic plan includes more than $1 billion in cuts, closes two unidentified prisons to save $25 million in the first year and $45 million in the second year, preserves taxpayer-paid dental coverage for adults, maintains state subsidies for the LifeStar medical helicopter, implements a SAGA waiver for welfare recipients, reduces executive branch management, and reduces the department of public safety fleet by 20 percent, lawmakers said. The prisons could be closed over the next two fiscal years because the prison population is currently down by about 1,000 inmates.

"We sought to reinvent government,'' Harp said on the Senate floor.

Sen. John Kissel, an Enfield Republican who has six prisons within his Senatorial district with more than 8,000 inmates, said that closing two prisons is a "preposterous'' and "haphazard'' idea as some of the top prison officials are taking advantage of the state's retirement incentive program and the prison leadership will be changing at the highest levels. The state currently has 18,865 prison inmates, and officials have been fighting through the years to keep the number at less than 20,000 inmates.

With veteran prison guards taking the retirement plan and leaving their jobs, the prisons could be short-handed in the near future and any idea of closing prisons is "specious and completely without grounding,'' Kissel said, adding that the idea is "extraordinarily shortsighted'' at a time when the prisons are still crowded.

The Democratic budget proposal would consolidate the administrative hearing functions of the Department of Children and Families, Department of Transportation, and Commission on Human Rights and Opportunities into a new Office of Administrative Hearings.

The tax increases, Daily said, are about $700 million lower than the level approved by the tax-writing finance committee. A wide variety of fee increases includes a tire fee increase of $3 per tire.

Sen. Dan Debicella, a Shelton Republican, said a person who smokes two packs a day will pay an extra $600 per year in cigarette taxes. The bill also cannot be deemed as simply a tax on the rich, he said.

"It is an attack on the middle class through the largest tax increase in Connecticut history,'' Debicella said. "The average family in Connecticut will pay an average of $500 to $1,000 more per year. ... Even if the middle class isn't paying the tax to the government, they're the ones who will be paying the increased corporate tax.''

"If you're unlucky enough to pass away and you live in Fairfield County, we're raising your taxes, too,'' he said.

"President Obama has said raising taxes in a recession is the wrong thing to do,'' Debicella said. "Why are we taking the opposite from what the national Democratic Party and Democrats in other states are saying?''

The bill includes more than $100 million in the sale of assets, but no assets are identified.

"Without specifics, it's just a gimmick,'' Debicella said.

"My plea is to the moderates in the circle,'' Debicella said.

The budget keeps high-earning employees at various commissions, including the Permanent Commission on the Status of Women, but some line-items are reduced by 20 percent for the commissions.

Sen. Andrew Roraback, a Goshen Republican, said the bill had only "three hours of sunlight'' as Republicans were largely unaware of the details of the bill until Thursday morning. In response to Roraback, Daily said there is a possibility that the budget will still be $263 million in deficit at the end of the two-year budget.

He noted that Democrats had ''repeatedly, emphatically'' called for months for the budget to balance as outlined by the legislature's non-partisan fiscal office.

"I am a zealous guardian of transparency in government,'' Roraback said at one point. "I do think we can do much better by the people of the state of Connecticut. ... We have to balance our budget'' without $2.5 billion in new taxes and fees.

Noting the rate of taxes, Boucher said that her estate-tax lawyer in Fairfield County has told her that some citizens have moved to Wyoming because that state has no income or estate taxes.

"What we're doing today is huge,'' Boucher said, adding that lawmakers in Maine have dropped their highest income tax rate because the state was losing jobs.

Sen. L. Scott Frantz of Greenwich said, "Connecticut has been an incredible place to do business'' for financial services firms, private-equity funds, hedge funds, and other businesses.

"Are our golden days over?'' Frantz asked. "Arguably, possibly, yes. ... In my neck of the woods in southwestern Connecticut, we will lose billions and billions in capital. ... Maine gets it. Maine says we want to hang on to what we have here.''

For some people who see a 30 percent surcharge on the estate tax, Frantz said, "They will leave the state in a heartbeat.''

The bill includes $112 million in asset sales, $1.4 billion in transfers from the rainy day fund for fiscal emergencies, and about $2 billion in federal stimulus money - all so-called "one shots'' that will not be available when the two-year budget is over.

"The corporate taxes in here hit the middle class,'' McKinney said.
Senate approves budget 
DAY
Published on 6/25/2009
 
Hartford — A deeply divided state Senate approved a new two-year budget plan this afternoon that would raise taxes on high-income individuals and corporations while making what its supporters described as major cuts in spending.

The Senate voted, 19-16, to back the budget bill, with four of the 24 Democratic senators breaking ranks to vote against the package, which now proceeds to the House of Representatives.

But though the bill's passage in the lower chamber is a virtual certainty, so too is a veto from Republican Gov. M. Jodi Rell. And the divisions among Senate Democrats highlight the lingering disagreements over the proper way to close the state's projected two-year deficit of nearly $9 billion, with a core of moderates resisting what they see as insufficient spending cuts and an inappropriate dependence on income tax revenue raised from the wealthy.

Thursday's vote comes after months of wrangling in Hartford over how best to close an expected deficit now projected to reach nearly $9 billion over the next two fiscal years. That wrangling appears unlikely to end soon.

Serious misgivings who remain about the spending and tax proposals among some members of the Senate's 24-member majority caucus have long meant that it will be impossible for Democratic leaders to assemble enough votes to override the governor.

Democrats have adopted some of the most recent spending cuts proposed by Rell, who has continued to insist that the state can close its deficit without resorting to income and business tax increases.

But the bill approved Thursday comes in at higher levels of spending than that proposed in Rell's most recent budget offering, and seems to skip over some of the most pressing budget questions altogether.

The package has a net bottom line of $35.7 billion over two years, but that figure does not include the state's Special Transportation Fund, which lawmakers said would be dealt with in budget implementation bills if Rell agreed to sign the bill. Including the transportation fund, which funds state road and highway programs, would bring the bottom line of the budget to over $37 billion.

The income tax changes make the following changes to the current 5 percent maximum tax rate on income:

— 6 percent for couples filing jointly with $500,000 or more of taxable income;

— 6.5 percent for those with $600,000 or more;

— 7.5 percent for those with $750,000 or more.

The bill also adds a three-year, 25-percent surcharge on the corporation income tax, and a three-year, 30-percent increase on the estate and gift tax on those with estates worth $2 million or more.

The bill would raise the per-pack tax on cigarettes to 75 cents.

Democrats “sought to reinvent government” in assembling their bill, said Sen. Toni Harp, D-New Haven, the co-chairwoman of the Appropriations Committee, anticipating objections from Republicans that the budget was sure to be vetoed, and thus more a negotiating tactic than an attempt to actually set a new two-year budget in place.

“This budget is not an intellectual exercise,” she said. “It is not about numbers. It is about the people.”

Republicans, like Sen. Dan Debicella, R-Shelton, the committee's ranking member, were unimpressed.

Debicella called the tax increases in the proposal “an attack on the middle class,” rejecting the assertions by Democratic lawmakers that the hikes would primarily fall on the wealthy who can best afford to pay.

Business tax hikes would be passed on as costs to consumers, Debicella noted, and along with others noted that Democrats had included more than $100 million in anticipated revenue from increased state fees — a tactic also used by Rell in her budget proposals — but gave no indication what fees would be raised, or by how much.

The legislature “haven't made real cuts in this budget,” Debicella said.


Dems huddle on budget as deadline looms
By Ken Dixon, STAFF WRITER
Posted: 06/19/2009 10:27:02 PM EDT
Updated: 06/19/2009 10:34:53 PM EDT

HARTFORD -- While rank-and-file lawmakers easily approved bills that would fund summer jobs and provide expanded unemployment benefits, majority leaders Friday gathered Democrats behind closed doors to explain options for a new two-year budget.

Speaker of the House Christopher G. Donovan said that he expects to debate a budget sometime next week and that he intends to reach out to Republican Gov. M. Jodi Rell over the weekend to try to get a negotiated deal by the June 30 end of the fiscal year.

He declined to say what the minimum threshold would be for a higher income-tax rate on Connecticut's wealthiest.

But Senate President Pro Tempore Donald E. Williams Jr., D-Brooklyn, told reporters late Friday afternoon that the proposed progressive income tax will raise rates starting at joint incomes of $500,000. The top tax rate would be 7.9 percent, compared to the current 5 percent maximum rate, he said.

Williams said while much of the package is still "under negotiations," the Democratic budget would raise taxes by $2.9 billion over the biennium.

Democrats rule the House by 117-37, but Senate Democrats have a razor-thin two-thirds majority -- 24-12 -- needed to override a potential Rell veto.

Rep. John C. Geragosian, D-New Britain, co-chairman of the budget-writing Appropriations Committee, said the two-year $37.9 billion package is down from the $38.2 billion approved in committee in April, which included $3.3 billion in new taxes.

Rell proposed a $38.4 billion budget with no new taxes in February, then, amid rising deficits, revised it in late May to $37.2 billion.

Geragosian said the Democratic budget includes about $800 million in undefined, year-end savings in various state departments called "lapses," plus $300 million in spending reductions. If approved, the lapses would put the onus on the governor to make the spending cuts.

During House and Senate action, lawmakers, during a couple hours of mid-afternoon debate, agreed to take funding from a variety of state departments and use the money in the fiscal year that starts July 1.

Another part of the bill would take $30.3 million in federal stimulus funds for the state Department of Labor under the federal American Recovery and Reinvestment Act. Included in the funding is $11 million for summer youth jobs, $4.3 million for job training and $14.8 for added unemployment benefits.

A second bill, left over from the regular legislative session that ended June 3, would change teacher qualifications and require professional development among the state's teachers' corps. If signed by Rell, the bill would allow the state Board of Education to grant extensions of time for teachers seeking provisional and professional certification requirements.

House Minority Leader Lawrence F. Cafero, R-Norwalk, criticized Democrats for saying items were in the education bill that were not in it and warned that the more important issue is completing a budget by the start of the next fiscal year.

"We thought the bills we were going to handle today were necessary for us as a state to move forward," he said.

Sen. Dan Debicella, R-Shelton, attempted to split the jobs legislation out of the overall bill, but his effort failed along party lines. He said the budget juggling within the Democratic legislation used revenue estimates from 2007, when the state had a billion-dollar surplus instead of a billion-dollar deficit.

"This just strikes me as us saying you know what? Let's ignore the fact that we do have a $1.2 billion deficit and let's turn the clock back 24 months to when the budget was in balance and let's actually use those revenue figures to say whether this is a go od idea or not," he said.

"We know there's a huge deficit today that this will add to."
State workers flock to early retirement 
DAY
By Ted Mann 
Published on 6/19/2009 

Hartford - When they conceived the state's latest retirement incentive program as a means to save money in a recession, Connecticut officials hoped to entice 3,000 government employees to retire.

They've already broken that threshold, budget analysts said Thursday, with nearly 3,500 state employees opting to retire so far and more potentially to come before July 1, the deadline to apply for the state incentives.

So far, 3,460 employees have either retired or announced their intention to do so by July 1, staffers for Gov. M. Jodi Rell announced, adding that the departures will help the state save on personnel costs, including salaries and health care benefits.

”My goal is to reduce the size and cost of state government - and the RIP is turning out to be a very effective tool in achieving that goal,” Rell said in a written statement, referring to the incentive program by its common acronym. “The state employees who are retiring are helping us to resolve the enormous financial issues facing Connecticut. The fact that we will achieve an even greater cost savings than anticipated is good news for our state and its taxpayers.”

Projected savings from the early retirement program were among the largest components of a roughly $700 million concession deal negotiated between the Rell administration and a coalition of state employee unions earlier this spring. Using an estimate of 3,000 employee retirements, the governor's budget office projected savings of nearly $111 million in the 2010 fiscal year, and more than $108 million in each of the next two budget years.

Rell also said she expects that restrictions on rehiring to fill some vacated positions will help hold the state's workforce down permanently.

Through those restrictions, “we can ensure that our government is permanently smaller - and less expensive,” Rell said.

The announcement about the surge in retirements was positive news for the state's fiscal affairs. Connecticut faces a two-year deficit projected to be as high as $8.7 billion, and Rell and legislative Democrats remain far from a deal on the biennial budget, with the governor insisting on deeper spending cuts as Democrats hold out for the preservation of some programmatic expenses through higher taxes on the wealthy, middle class and businesses.

On Thursday, the eve of a relatively non-controversial vote to appropriate millions in federal stimulus program aid for seasonal employment programs, Democratic leaders claimed they had achieved a modest breakthrough, agreeing to $1.1 billion in new spending cuts that would enable them to reverse a proposal to cut the state property tax credit, a benefit that Democrats have previously said was a boon for middle-class homeowners.

But through a spokesman, Senate President Donald E. Williams Jr., D-Brooklyn, and House Speaker Christopher Donovan, D-Meriden, refused to identify those new spending cuts, drawing a skeptical response from Rell's office.

”We want a chance to reach out to caucuses first,” said Derek Slap, the spokesman, in an e-mail message. But “rest assured we will be doing that as soon as possible.”

”I think the pressing question is, 'What are the cuts and where are the cuts?' “ said Christopher Cooper, a spokesman for the governor who is himself one of the most well-known state employees planning to retire July 1.

Democratic leaders plan to put a proposed budget bill before their respective caucuses as soon as today and are widely anticipated to bring a budget to a vote next week, even without agreement with the governor's staff. 
Legislative Democrats Say They'll Vote On Unilateral Budget Plan
The Hartford Courant
By CHRISTOPHER KEATING
June 17, 2009

With budget talks with the Republican governor stalled, the Democrat-controlled General Assembly is expected to vote as soon as next week on its own budget plan, which would raise the state income tax on Connecticut's wealthiest residents.

House Speaker Christopher Donovan said the vote will be taken because Democrats and Gov. M. Jodi Rell are still far apart on a budget compromise that the governor would be willing to sign.

"If we don't have an agreement, we'll certainly vote for something before June 30," Donovan said Tuesday. "We haven't had really focused discussions with the governor as of yet."

Donovan said the Democrats will drop their plan to eliminate the sales tax exemption on some computer and data-processing services, something that had prompted complaints from information technology companies.

Donovan said the budget package would include "a progressive income tax," but he declined to provide details on the rates. At the committee level, Democratic lawmakers voted in April for increased income tax rates for couples earning more than $250,000, but some legislators have recently been pushing to boost the income threshold to $500,000 per couple so that fewer people would be subjected to tax increases.

In addition, the tax-writing finance committee voted for a 30 percent surcharge on the corporate profits tax, but some lawmakers are pushing to drop that figure to 25 percent.

The House of Representatives will meet in special session Friday on other issues, but Donovan said that that would be too soon to vote on the Democrats' budget plan.

Rell's spokesman, Christopher Cooper, criticized the lack of details in the Democratic proposal. Rell has criticized proposed tax increases and offered her own budget with no tax increases, but large reductions in spending.

"The Democrats should put their cards — and their taxes — on the table," Cooper said. "Why all the mystery? It's like a game of three-card monte. Unfortunately, the taxpayers are the victims."

"This is like going on a blind date and finding out that Freddy Krueger is who is picking you up," Cooper said. "When the Democrats are ready to close their Off-Broadway production of ' Wicked' and negotiate a budget that is in the interest of all the people of Connecticut, Gov. Rell will be glad to sit down with them."

Copyright © 2009, The Hartford Courant
Democratic legislative leaders committed to income tax hike
Greenwich TIME
By Brian Lockhart, Staff Writer
Posted: 06/15/2009 09:52:26 PM EDT

HARTFORD -- The idea has proven unpopular with Republican Gov. M. Jodi Rell and even some of their own rank-and-file members, but Democratic legislative leaders said they intend to include income tax increases in the new budget proposal they hope to unveil in the coming weeks.

"In order to avoid decimating state services altogether, we're going to have to have some new revenues, and the income tax is our 'workhorse tax,' " said state Sen. Majority Leader Martin Looney, D-New Haven.

To help address a potential $8.7 billion deficit, legislative Democrats in early April proposed a two-year budget that hiked income tax rates on wealthier households earning more than $250,000.

But the revenue package was immediately opposed by some Democrats, including many from lower Fairfield County, and leadership has since been retooling the proposal.

Looney and House Speaker Christopher Donovan, D-Meriden, said the hope is to vote on a new budget before the start of the 2009-10 fiscal year July 1.

"We'll have a new tax package," Donovan said. "The one (proposed in April) was a trial balloon."

Donovan agreed that some form of a "progressive income tax" will be included in the proposal, even if some Democrats are unhappy about it.

"We try to get as many votes as possible," Donovan said. "I've seen some ugly budget votes and some very unified ones. I'm hoping we end up with a unified one."

Asked if lawmakers might be upping the minimum household income limit from $250,000 to make it more palatable for some Fairfield County legislators, state Sen. Eileen Daily, D-Westbrook, a chairwoman of the Finance, Revenue and Bonding Committee, said, "I'll tell you truthfully, we have looked at about 16 different combinations."

"We have asked for runs that go lower (than $250,000), and we have looked at runs that would raise the threshold," Daily said.

She said the risk in raising the threshold is that the percentage increases would have to be higher in order to capture enough revenue.

Jeffrey Beckham, spokesman for Rell's budget staff, said one reason the governor wants to hold the line on tax increases is to keep Connecticut competitive with neighboring states, which are raising taxes to address their own budget woes.

"We might actually attract residents and business," Beckham said.

Looney said that is an appropriate goal, but it does not mean Connecticut lawmakers cannot enact some percentage income tax increase.

"Everybody wants to make sure whatever the highest rate, is it's still lower than the maximum rates in neighboring states," he said.

Looney said the Democrats' package also is going to contain major cuts -- something some members of his own party complained was lacking in the April proposal.

"In the end, there will be significant, painful cuts and tax increases," Looney said. "No one will be happy."

Some area Democrats remained skeptical about voting for income tax increases.

State Rep. Peggy Reeves, D-Wilton, said, "I'm not going to vote for anything that is going to hurt disproportionately my community."

But state Rep. Christopher Perone, D-Norwalk, said he could be convinced.

"At a higher (household income) level, it makes it a little more palatable in our neck of the woods," Perone said.
Special Session:  House on Thursday, or maybe now Friday, Senate on Friday and/or Saturday (?)
State Prepares For Life Without Budget 
DAY
By Susan Haigh 
Published on 6/15/2009

Hartford - Connecticut's budget standoff at the state Capitol has Kim Beauregard worried.

She runs InterCommunity Inc., a nonprofit agency that offers numerous social services including outpatient mental health care and substance abuse treatment to more than 2,000 people in East Hartford, Newington, Rocky Hill, Wethersfield, Glastonbury and Marlborough.

If an agreement on a new two-year budget isn't reached before June 30, the end of the fiscal year, Beauregard fears payments from the state may not arrive.

Bipartisan budget talks ended when the General Assembly adjourned its regular legislative session on June 3. Gov. M. Jodi and her fellow Republicans have been at odds with the majority Democrats about whether higher taxes are needed to cover the state's budget deficit, estimated to be as much as $8.7 billion over the next two fiscal years.

There are signs that the rhetoric may be softening. Gov. M. Jodi Rell e-mailed all state legislators on Wednesday, asking them to study both of her budget proposals and give her input on what cuts they can live with.

Senate President Donald E. Williams Jr., D-Brooklyn, said he welcomed Rell's effort to reach out and urged her to sit down with legislative leaders to review what their respective negotiating teams have already accomplished in closed-door talks.

However, there is a chance that the Democrats may try to vote out their budget this week, likely garnering a veto from the governor. Williams set aside possible special sessions for Friday and Saturday. The House of Representatives scheduled a session day for Thursday.

In the meantime, Rell's budget staff is working on possible plans for how Rell will run the state without a budget beginning July 1.

”The law provides for her, as the chief executive of the state, to carry out the essential functions of government, and we will be providing her with options on how to do that,” said Jeffrey Beckham, a spokesman for the Office of Policy and Management.

Even without a budget, there still are laws that require taxes and fees to be paid. Federal funds are also expected. So that means money will be coming into the state's coffers.

Beckham stressed that while research and some preparation is under way, the governor's budget office still hopes to reach a deal before June 30.

Former Govs. John G. Rowland and Lowell P. Weicker Jr. both had to run the state without budgets in 2003 and 1991 respectively. In Rowland's case, he issued several executive orders to continue essential government operations.

During the 1991 budget crisis, Weicker and the General Assembly were able to agree on several mini budgets that covered two weeks apiece. Those were more detailed than the executive orders that Rowland issued during the 2003 budget impasse.

Like this year, there were concerns in 2003 - when the deficit was just about $1 billion - regarding state funding delays and how they'd affect municipalities and programs ranging from AIDS counseling to Dial-A-Ride programs. Rowland wound up releasing some money at one point to keep mental health and addiction programs operating.

This time around, officials at nonprofit agencies say the stakes are higher. The economic recession has lead to increased caseloads - they're up 14 percent from last year at InterCommunity Inc., mostly for mental health care. Meanwhile, these agencies have been flat-funded by the state in recent years and many already face financial troubles.

Additionally, some agencies with lines of credit at banks have seen those lines reduced by half.

”They're not all that trusting that the state is going to come through,” said Diane Manning, president and CEO of United Services Inc. in Dayville. Her agency is negotiating a line of credit with a new bank.

At this point, Manning doesn't expect any layoffs. She said she'll be able to cover the July payroll if there isn't a state budget in place.

”But after that,” she said, “it is pretty hairy.” 

Rell wields veto pen early 
DAY
By Susan Haigh 
Published on 6/5/2009

Hartford - Connecticut Gov. M. Jodi Rell on Thursday issued her first veto this year, nixing legislation that Democrats claim is needed to help reach an agreement on a new budget.
Her veto comes a day after the regular session adjourned.

Meanwhile, a select group of legislators and budget staffs from the General Assembly and governor's office are expected to regularly meet behind closed doors during a special session to break the impasse over the two-year budget that begins July 1.

The legislation called for a new procedure for reaching a consensus on the state's estimated revenues. Under the measure, if the governor's and legislature's budget offices could not reach agreement on a figure, the elected state comptroller would decide what it would be.

The two offices have been at odds over the size of the deficit the state will face over the next two fiscal years. While Rell's office estimates the figure at $7.9 billion, the legislature's Office of Fiscal Analysis predicts it will be closer to $8.7 billion.

But Rell noted Thursday that the two offices have been able to eventually agree on a figure.

”I see no reason why this process, which has served us so well in good times and bad, cannot serve us equally well in 2009 and beyond,” she said.

Senate President Donald E. Williams Jr., D-Brooklyn, said he hopes Democrats, with a veto-proof majority in the General Assembly, will try to override the veto.

”The legislation the governor vetoed will fix a fundamental problem - the lack of recognition by the governor of the state's true deficit,” he said.

Meanwhile, Williams and other Democratic leaders made it clear they plan to vote on a budget before the fiscal year ends June 30. They vowed to approve a budget with or without Rell's involvement.  Democratic leaders made the pledge at a post-session news conference held in New Britain to call attention to Rell's recent supplemental budget cuts to the Small Business Incubator Program that assists startup technology companies.

”One way or another, we want to put a budget on the governor's desk before July 1,” said House Speaker Christopher Donovan, D-Meriden. “We are digging our heels in right now because we need to respond.”

He said Rell's supplemental budget includes draconian cuts to services for the elderly and needy and to small businesses.  Williams said Democrats feel they must work to protect the values of the state.

”It really is about the heart and soul of our future,” he added.

Republican legislative leaders remained steadfast in their belief that talk of raising taxes to cover the state's deficit is premature. House Minority Leader Lawrence Cafero Jr., R-Norwalk, said he hoped legislators would now return to their districts and hear from constituents who can't afford tax increases.

”Maybe they'll listen to those real people,” he said. 
Legislative Session Ends Without Adopting A Budget
The Hartford Courant
By CHRISTOPHER KEATING, JON LENDER, And DANIELA ALTIMARI
June 4, 2009

The 2009 legislative session may be remembered more for what lawmakers didn't do than for what they managed to accomplish.

As lawmakers stumbled toward a midnight adjournment Wednesday to finish five months worth of work, both the House of Representatives and the Senate debated relatively minor bills that were not among the year's most pressing issues, such as the sales tax liability of asphalt manufacturers.

The biggest failure was clearly the lack of a state budget, as Republicans and Democrats have been stuck in gridlock over how to close a deficit projected as high as $8.7 billion over the next two fiscal years.

Gov. M. Jodi Rell and Republican legislators have offered separate budget plans that would not raise taxes, while Democrats have offered more than $3 billion in tax increases to close the gap. But there has been little movement toward a compromise, and a special session is likely later this month.

Besides the budget, the legislature was unable to pass several high-profile bills that were debated this year, such as banning smoking in the state's two casinos, decriminalizing marijuana, outlawing the "zone pricing" of gasoline, and requiring employers to provide paid sick days to their workers.

Lawmakers also could not reach agreement on banning open alcohol containers in automobiles or allowing citizens to both register and vote on Election Day. One of the year's most controversial bills — to change the legal and financial structure of Roman Catholic parishes — was withdrawn almost immediately after it was introduced.

And one of the most significant measures of the session — the abolition of the death penalty in Connecticut — faces a certain veto by Rell.

"The bottom line is, our state is dying, and these guys are handing out Band-Aids," said Republican State Chairman Chris Healy. "At some point the public is going to figure out that they have wasted six months of valuable time."

To mark the lack of a budget, Rell declined to deliver the traditional end-of-the-session speech that governors have delivered in the House chamber for decades. At different times through the years, Govs. Lowell Weicker and John G. Rowland skipped the speech to show displeasure with the legislature's unfinished business.

Instead, Rell released a statement that focused not on the bills that have passed but on the work ahead.

"The legislative session is now a page of Connecticut history," Rell said. "It is time to turn the page, to move forward with commitment and resolve to work together to deliver to the people of this state a budget that will meet their needs now and in the future."

Health Care

But House Majority Leader Denise Merrill, a Storrs Democrat, cited a major package of healthcare bills, including the controversial SustiNet universal health-care proposal and a controversial "pooling" bill that would allow small businesses, municipalities, and nonprofit agencies to join the state's gigantic healthcare pool.

"One of the biggest things we did this session is try to address health-care reform," Merrill said. "The last five years or so, it's increasing in urgency. ... We're one of the first states to take action on coverage for children with autism."

But the fate of health reform remained unclear at the session's close with no funding for any major initiatives and Rell's support in question.

Other lawmakers said the General Assembly clearly had some noteworthy bipartisan accomplishments that included reforming the state's antiquated probate court system and prohibiting the use of machine guns by minors following a tragic accident in Massachusetts that killed a Connecticut boy.

Democrats passed other bills they considered top priorities, but it was not clear Wednesday night how many of those bills Rell might veto. Those include the listing of calories on menus at major fast-food restaurants and ordering a special election to fill a U.S. Senate vacancy — overturning a 64-year precedent that allowed the governor to make the appointment.

Senate Democratic spokesman Derek Slap said lawmakers passed important bills this year that will improve life in Connecticut, even if they do not generate front-page headlines. Those include measures to create so-called "green" jobs and establish an enterprise zone at Bradley International Airport in Windsor Locks in an effort to create jobs.


Wild Animals, Farms

In bipartisan moves on the final night, the House approved bills on wild animals and dairy farms.

Lawmakers decided to ban the private ownership of chimpanzees following a vicious attack that blinded a woman in Stamford earlier this year. The watered-down bill calls for banning gorillas, chimpanzees and orangutans, but does not cover the huge list — such as alligators and pythons — that had been in the original legislation. The maximum civil penalty for violating the law will be $1,000.

The House also approved a bill by a vote of 133 to 16 to provide relief to the state's $1 billion dairy industry. The measure, which the state Senate approved Tuesday, creates a special fund to help beleaguered farmers. The money will be raised through a $10 increase in the $30 fee for recording municipal land documents.

Connecticut's 151 dairy farms face enormous economic pressures, as 19 have sold off their cows and closed within the past year.

The bill's boosters say the benefits go beyond helping farmers. They say dairy farms provide jobs, and their bucolic pastures make Connecticut a nicer place to live. And with a renewed emphasis on locally grown food, the 351 million pounds of milk provided by local cows in 2008 are even more crucial, said state Rep. Terry Backer, D- Stratford.

"We are … divorced from where our food comes from," he said.

Rell, a strong proponent of the measure, announced she would sign the bill about an hour after it received final legislative approval.

The Democrats' decision to put off adopting a state budget until a special session meant that the pace of the last day was not as frenetic as in past years.

Late Wednesday night, the chamber passed a resolution apologizing for slavery in Connecticut that had previously passed in the House.

But time ran out in the Senate on a teacher certification bill that would have made it easier for qualified professionals to make a mid-career shift and enter the teaching ranks. They would still have needed a teaching certificate but would no longer have to take content-area classes on subjects they already know.

Also, one public school in Granby had been seeking an exemption from the state's 180-day school requirement because of amount of time it had been closed because of the swine flu outbreak. But time ran out before the exemption was approved.

Earlier in the evening, Senate Republicans stretched out debates on bills to make a political statement about what, in their view, was the relative insignificance of the business that the Democrat-controlled General Assembly was conducting in the absence of adopting a budget.

Senate Republicans, for example, engaged in an obvious stall for hours on a bill that might otherwise have been discussed for 15 minutes and approved unanimously. It would have required the heads of the state's administrative services and social services departments to consult with the state comptroller and other officials and develop a plan for the state to buy prescription drugs in bulk for its health plans.

Sometimes members of a party stretching things out won't admit what they are doing. But on Wednesday, Healy acknowledged what was going on.

"Obviously, sure, why not?" Healy said.

By stretching out debates and in effect running out the clock, "we're stopping a lot of bad stuff from becoming law," he said. "They should have basically adjourned when they came in and decided that they're not going to do the one thing they're elected to do, which is to adopt a fair, sustainable state budget."

Copyright © 2009, The Hartford Courant

Rell: Holding Down Taxes Is Key To State's Recovery 
DAY
By M. Jodi Rell 
Published on 5/31/2009

The Connecticut General Assembly is just days away from its deadline for finishing its work. Yet we still do not have a state budget for the next two years.
In February, I proposed a two-year budget that would cut state spending, consolidate or merge dozens of state agencies, maintain state aid to cities and towns so burdens would not fall on property taxpayers and give those municipalities much-needed relief from costly state mandates - all without raising taxes.

Tax increases, I said, would be the worst thing we could do in the middle of a national recession.

And Connecticut's economy has been terribly battered by this national recession. Thousands of families - thousands of lives - have been disrupted by job losses, foreclosures, Wall Street turmoil and lingering uncertainty. Employers, many of them mainstays of Connecticut's economy, have been forced to lay off dedicated workers.

Since I released my recommended budget in February, the economic picture has only gotten darker. Our state has lost 18,100 jobs. We have seen more than 4,000 businesses shut their doors forever. More than 7,500 families have lost their home to foreclosure.

And still - four months later - we have no budget. The legislature has not even held a vote on a budget in the Senate or the House.

Because of the recession, we face enormous deficits for the next two fiscal years, as well as a persistent deficit in the current budget year that ends June 30. I have been working with lawmakers on a new budget for several weeks - but it has become increasingly clear that some do not have the will to make the spending cuts necessary to close those budget gaps without raising taxes.

So this week I took the unusual step of offering another budget - a second budget - that, once again, contains no tax increases.

Like my budget in February, this new budget makes deep and painful spending cuts. They are not cuts I relish making. But the families of Connecticut are counting on their elected leaders to make those cuts and to finish their business on time.

Like my February budget, this proposal preserves municipal aid so that tax increases are not passed on to local property taxpayers. It merges and consolidates agencies to make Connecticut's government smaller and more efficient - just like my budget in February did.

And most importantly, this budget is in line with what the people of our state can afford - just like my budget in February. That means it contains no tax increases and in fiscal-year 2010 reduces spending from current levels.

I did this because the bloat of bureaucracy is no more affordable now than when I first spoke of it in February; because families have not stopped struggling since February; and because the underlying truths of our economy have not changed since I laid out my original budget: Connecticut residents cannot afford massive tax increases. Connecticut businesses cannot afford massive tax increases.

Consider that nearby states like New York and New Jersey are raising their income taxes while Massachusetts is raising its sales tax. The top income tax rates in New York and New Jersey are now 8.97 percent (in New York City it's an astonishing 12.62 percent!), while the top bracket in Rhode Island is 9.9 percent.

Connecticut's top rate is currently 5 percent.

By holding the line on taxes and making the tough decisions now, we will make Connecticut a beacon of oportunity - our state will become comparatively more affordable for business and more appealing for investment.

Job creation will climb as more and more companies move to - or grow in - a business-friendly Connecticut. We can reverse the “brain drain” and keep our college graduates in good-paying jobs right here in Connecticut. Our housing market will rebound as those graduates and people attracted to our state seek new places to live.

This is not economic theory - it's economic fact.

Frankly, tax increases are the easy choice. But all they do is “feed the beast” - and two years later the beast is back, hungry again, and always a little bit larger. Now is the time to make the difficult decisions.

I am not looking for a battle, but I am willing to fight one because it's a battle worth waging. The families and people of Connecticut are always worth fighting for. Please join me in the remaining days of this legislative session by urging your lawmakers to join me in making the difficult, but necessary choices to pass a budget that contains no tax increases. 

As Legislature Acts On 3 Bills Likely To Be Vetoed, Rell Castigates Democrats
The Hartford Courant
By CHRISTOPHER KEATING and JON LENDER
May 31, 2009

The legislature, in a rare Saturday session, passed three controversial budget and health care bills that Republicans want Gov. M. Jodi Rell to veto. Meanwhile, Rell ripped Democratic lawmakers for failing to reach a deal to close the state's huge budget deficit.

Before adjourning for the day, legislators also voted to schedule a special session for later in June, officially admitting that they don't expect to craft a budget compromise by midnight Wednesday — the constitutionally mandated deadline of the legislature's regular session.

Rell blasted Democrats over a lack of action on the deficit, which has been projected as high as $8.7 billion over the next two fiscal years.

"Some may call this a surrender, and some may call it a failure of leadership," Rell said. "It is both, but more importantly, I believe it is a shameful abdication of constitutional responsibilities. After nearly five months, the Democrats have done nothing to address Connecticut's fiscal crisis, nothing to help create jobs or help working families through these difficult economic times, and nothing to address unemployment."

Looking back over her 25-year career as a legislator, lieutenant governor, and governor, Rell said the legislature's lack of action is unprecedented.

"In all my years of government, I have never seen a more disorganized group of lawmakers than these Democrat leaders," Rell said.

Democrats fired back, saying Rell caused months of delays in the budget negotiations.

"The unfortunate fact is that throughout the entire legislative session, the governor failed to submit a balanced budget," said Senate President Pro Tem Donald Williams, the highest-ranking senator. "Families and businesses across Connecticut want solutions, not angry rhetoric. In addition, she failed to abide by her own promise four months ago that pain in the budget would be shared fairly by all, and not balanced on the backs of the elderly, the sick, students and the middle class."

"Democrats in the legislature are working night and day to protect the very same people the governor is willing to sacrifice in order to protect the wealthy," House Speaker Christopher Donovan said. "We just learned on Thursday that the governor wants to close technical schools in Stamford and Bristol, six courthouses in Manchester, Derby, Meriden, Putnam, Norwalk and Bristol, a DMV office in New Britain, eliminate funding for libraries, for people with disabilities, for young people who want to go to college, and cut funding for job training. We won't do that. … Isn't it time for the governor to sit down and talk with us, to put everything on the table, to be productive?"

Budget Power

A bill passed by the House Saturday would take power away from the governor's budget office, while two others passed in the Senate cover health care reforms that Republicans say would be too expensive.

But the Democrats, who control both legislative chambers, said the bills could lead to a budget resolution during tough economic times and bring about important health care improvements for Connecticut citizens.

The bill that could take power from the budget office is directly related to the ongoing dispute over the size of the deficit. It says that if the governor's budget office and the legislature's nonpartisan fiscal office cannot reach a consensus on revenue forecasting, the task would be taken over by the state comptroller, a post now held by Democrat Nancy Wyman.

The Republican minority has only 37 of the 151 House members, but GOP leader Rep. Lawrence Cafero of Norwalk said his party opposed all three bills.

"I pray to God there are a ton of vetoes," Cafero said after the House adjourned. "If this [revenue forecasting bill] isn't the biggest stick in the governor's eye, I don't know what is."

Maintaining her traditional posture, Rell has not declared whether she would veto any of the three bills. Her spokesman declined to make any veto pronouncements on Saturday.

Senate Majority Leader Martin Looney, a New Haven Democrat, and House Speaker Donovan both said they hope to reach an agreement with Rell on the size of the deficit in order to avoid a veto override vote. Democrats have veto-proof margins in both chambers, and Looney said he believes the override votes will be there, if needed, on the forecasting bill.

Health Care Changes

After the House adjourned Saturday, the Senate approved the controversial health "pooling" bill, which would allow municipalities, small businesses and nonprofit organizations to join the state employees' gigantic health care pool. The vote was 21-12, with three members absent. Rell vetoed a similar bill last year.

The Senate passed the SustiNet universal health care bill on party lines. Democrats said SustiNet is a progressive, forward-thinking system that will vastly improve health care and position the state to become " Obama-ready" for the expected health care changes at the federal level.

Republicans denounced the bill as a costly first step toward European-style socialized medicine.

Sen. Jonathan Harris, a West Hartford Democrat who led the debate, said the current health care system needs to be improved because it is too expensive. Every year, public and private health care systems spend $22 billion to cover health care in Connecticut. The SustiNet plan, he said, will save $1.8 billion.

Harris said the bill covers the four biggest issues regarding health care: "cost, quality, access, and coverage."

"SustiNet is a self-insured coverage system," he said. "The delivery system is a very important piece of this. ... Every individual in this state should be entitled to a primary care doctor."

Harris was careful to say that the details will be worked out later.

"This bill does not implement SustiNet or any significant part of SustiNet," he said. "The General Assembly must come back to the drawing board" to implement SustiNet in the future.

But Sen. Dan Debicella of Shelton, the ranking Senate Republican on the budget-writing appropriations committee, said the bill is both bad health care policy and bad fiscal policy. It would be a huge drain on taxpayers in the future with costs not outlined in the bill, and the proposal would mirror "the gold-plated plan" that state employees now have, he said.

"The bill before us today is not the answer," Debicella said. "This bill presupposes the answer. The core of it is the wrong answer that we have presupposed. ... The bad policy in this bill says that we are going to harm the 94 percent who have health insurance to help the 6 percent of us who do not have it."

Sen. L. Scott Frantz, R-Greenwich, said he applauds the concept of improving health care, even though he opposed the bill.

"It's a noble cause," Frantz said. "The only question is: How do we get there?"

Three potential ways of reducing costs, he said, include medical malpractice reform, reducing tobacco use, and reducing obesity. If all tobacco use was eliminated, the system could save 40 percent to 60 percent of the entire health care bill, Frantz said. If obesity was eliminated, the system would save another 15 percent to 25 percent.

"I'm not sure government can take care of every need," Frantz said on the Senate floor.

Senate GOP leader John McKinney of Southport agreed with Frantz in opposing the bill, saying that a step toward single-payer, Canadian-style health care represents going in the wrong direction.

"The system we have, for all its flaws, is much, much better," McKinney said. "That's why this is the wrong bill at the wrong time."

But longtime health care advocate Tom Swan said Saturday's action will put Connecticut on the health care map as a national leader in advance of the changes expected to be made later this year by President Barack Obama's administration.

"People, nationally, understand that this is a very big deal in the national debate," Swan said.

Copyright © 2009, The Hartford Courant
Bridgeport Diocese sues Conn. over lobbying laws
CTPOST
ASSOCIATED PRESS
Updated: 05/29/2009 06:12:05 PM EDT

HARTFORD (AP) -- The Roman Catholic Diocese of Bridgeport is suing Connecticut officials over a requirement that it register as a lobbyist before holding any more rallies or using its Web site to oppose legislation.

The diocese filed a lawsuit in U.S. District Court on Friday seeking to stop the Office of State Ethics from what it calls an unconstitutional application of state lobbying laws.

State officials said they are reviewing the lawsuit and declined to comment.

Bridgeport Bishop William Lori says the diocese is exercising its free speech rights and not lobbying.

The diocese says it was told by the ethics office that it failed to register as a lobbyist when it took part in a rally at the Capitol in March and made statements on its Web site urging its members to oppose legislation.

Rell gets involved in budget logjam
CTPOST
By Ken Dixon, STAFF WRITER
Posted: 05/28/2009 07:51:54 PM EDT
Updated: 05/28/2009 09:52:32 PM EDT

HARTFORD -- Gov. M. Jodi Rell, in an attempt to break a political logjam that has stalled negotiations on a new two-year budget, offered majority Democrats an alternative budget Thursday afternoon.  The two-year, $34.4 billion proposal has no tax increases and would retain current levels of municipal aid, Rell said.

"This budget is more in line with what people can afford," she said during a news conference in her Capitol office. "Connecticut residents cannot afford a massive tax increase," she added.

Rell and minority Republicans expected the legislation to originate in the state Senate, where they had already filed an amendment that would force Democrats to debate a two-year $38.2 billion spending package. 
The Democratic budget has stalled since passing key financial committees controlled by the majority in early April. In February, Rell offered a $38.4 billion budget that would take effect for the biennium starting July 1.  The GOP effort was announced shortly after noon Thursday.

It would force the majority to defend its $3.3 billion in new taxes approved in committee last month, which Democrats have failed to bring to the floor of the state's House and Senate.  Several Senate Democrats voted against the legislation in committee, including state Sens. Bob Duff, D-Norwalk, and Andrew McDonald, D-Stamford.  The bill includes tax hikes on the state's wealthiest residents and would end a popular $500 property tax credit for middle-income homeowners.

Senate Minority Leader John McKinney, R-Fairfield, said that with less than a week in the legislative session, it's time Democrats debated their own bill, so he and other GOP lawmakers drafted it as an amendment to a controversial bill on the way the state creates budgets that Democrats had promised to debate today.

"The people of the state of Connecticut need us to pass a balanced budget," McKinney said. "The towns need to know how much municipal aid they're going to get. It seems the Democrats would rather debate a forecasting bill rather than debating a real budget, so we will offer a budget."

Democrats have a 24-12 majority in the state Senate.

Senate approves 'block the box' bill.  Law would allow police to ticket drivers who stop in intersections
Stamford ADVOCATE
By Brian Lockhart, Staff Writer
Posted: 05/23/2009 10:33:10 PM EDT
Updated: 05/24/2009 12:32:06 AM EDT

HARTFORD -- A bill aimed at allowing police in cities such as Stamford and Norwalk to fine motorists who stop in intersections, "blocking the box," cleared the state Senate last week.

But an amendment could lead the House of Representatives to scuttle the legislation.

Submitted by Stamford lawmakers at the request of the city's Board of Representatives, the bill would let municipalities adopt ordinances that would empower police officers to issue citations to drivers who attempt to squeeze through a green light and wind up blocking oncoming traffic.

Any municipality can implement the policy now, but state law currently does not allow police to penalize drivers.  With fines and fees combined, drivers could wind up paying $100 to $300.  Tractor-trailers and cars entering an intersection to make a turn would be excluded.  The legislation is modeled after "don't block the box" laws in New York City.  State Sen. Gary LeBeau, D-East Hartford, said during Thursday's debate of the bill that he has seen motorists impede traffic as they try to make a green light.

"Everybody's looking out for themselves," LeBeau said.

But other supporters -- including state Sens. Antonietta "Toni" Boucher, R-Wilton, and Kevin Witkos, R-Canton -- urged that the bill be amended.

As submitted, the legislation applied to municipalities with more than 50,000 residents.

Witkos, a police sergeant, said the proposal would be a good tool for police but said there are busy intersections in smaller cities and towns where it could be applied.  Boucher agreed, saying she would like to see the law, if passed, adopted in towns within her district, which are along the congested Route 7.  State Sen. Andrew McDonald, D-Stamford, a sponsor of the bill, said that in previous years, the bill was defeated in the House of Representatives because it included all cities and towns.

"I think Sen. Witkos is correct. It could be useful for smaller towns with large traffic volume," McDonald told his colleagues. "But that was the basis of this legislation being defeated last time."

Ultimately, the legislation was successfully amended, and the bill was unanimously passed by the Senate and went to the House.  Witkos and Boucher, both former members of the House of Representatives, said they would seek to lobby their former colleagues to ensure the bill is passed and sent to Republican Gov. M. Jodi Rell for her signature.

Rell: State death penalty 'warranted' 
DAY
By Ted Mann 
Published on 5/23/2009

Hartford - Gov. M. Jodi Rell vowed Friday to veto a legislative proposal to abolish capital punishment, hours after it narrowly passed the Senate, saying that some crimes can only be fittingly punished with a sentence of death.

”I appreciate the passionate beliefs of people on both sides of the death penalty debate,” Rell said in a statement released Friday afternoon.

The Senate had voted to approve the abolition bill early the same morning, after a nearly 11-hour debate riven by both philosophical and partisan disputes.

”I fully understand the concerns and deeply held convictions of those who would like to see the death penalty abolished in Connecticut. However, I also fully understand the anguish and outrage of the families of victims who believe, as I do, that there are certain crimes so heinous - so fundamentally revolting to our humanity - that the death penalty is warranted.

”I will veto this bill as soon as it hits my desk,” the statement concluded.

Rell's veto pledge came just hours after the Connecticut Network to Abolish the Death Penalty held a rally at the Capitol to highlight families of murder victims who support eliminating capital punishment. Lawmakers who backed the abolition bill had also held out hope that pressure from clergy, including the Connecticut Catholic Conference, and international attention might pressure Rell into reversing her longtime support for the death penalty.

Much of this year's debate on capital punishment in Hartford has turned as much on the practical application of the death penalty - whether, with all the safeguards required by the Constitution, it can ever realistically be applied - as on its morality.

With Rell espousing a moral obligation to seek retribution against those guilty of extreme crimes, sponsors of repeal, like Rep. Michael Lawlor, D-East Haven, are still trying to sway her on practical grounds.

Rell should ask state prosecutors and judges for “their off-the-record opinions on whether anyone will ever be executed in Connecticut,” said Lawlor, the co-chairman of the Judiciary Committee, after Rell announced her intention to veto the repeal bill. “I believe that she will be told what many of us have been told - the Connecticut death penalty is a false promise.”

Lawmakers would need two-thirds majorities in both chambers of the legislature to override Rell's veto, far more support than the bill received over the past two weeks.

The bill, H.B. 6578, passed the House of Representatives by a vote of 90-56, well short of an override but a larger margin of victory than some had anticipated. But it only squeaked through the Senate, 19-17, after the longest debate in either chamber of the current legislative session.

Rell's veto vow immediately provoked calls to reconsider from supporters of abolition, including Rep. Gary Holder-Winfield, D-New Haven, who said Rell's statement “seems to indicate that all family members of murder victims agree with her stance,” just hours after some family members who disagree rallied at the Capitol.

”I respectfully call on the governor to reconsider her stance as she looks at this issue in its complete context,” Holder-Winfield said.

Rell's veto pledge was “predictable,” Lawlor said in a brief interview, but he added, “it's not over yet.”

Senate leaders did not immediately transmit the passed bill to the governor Friday morning - anticipating it might lead her to veto it on the spot - and have hoped that in the period of codification before the bill formally reaches Rell, she might have a change of heart. It will be several days before the bill reaches Rell, perhaps as many as 10, lawmakers said...

Late in the day, a representative for William Petit, a doctor from Cheshire whose wife and two daughters were murdered in a home invasion nearly two years ago, and whose case was repeatedly invoked by Republicans in defense of capital punishment, e-mailed a message from the doctor to reporters.

”The legislators want to take years to talk about the killers and allow them to utilize our resources when these animals have broken a sacrosanct law of our society,” Petit's rambling message read in part. “Once you have broken this rule you have forfeited your right to live among us.”

No more "deregulation?"
Lawmakers move to scrap competition for electric customers 
DAY
By Ted Mann 
Published on 4/30/2009
 
Hartford - A key principle in the decade of reform and deregulation in Connecticut's energy markets goes as follows: If residential electric customers can choose among competitive retailers in buying their power, they'll benefit from the bidding war and ultimately pay lower rates.  But opponents of deregulation say the promise hasn't panned out.

Fewer than 10 percent of residential customers have left traditional “standard service” offered by utilities for electric contracts purchased in the competitive market.

And in the meantime, the utilities who provide that standard service have built in a “risk premium,” critics say - raising their rates in order to protect themselves against the chance that some of their customers will flee the existing system for the competitive markets.

On Wednesday, the state House of Representatives moved to close off the competitive option for residential electric customers and those using 100 kilowatts or less per month, effectively rolling back that segment of Connecticut's deregulation experiment.

The move, supporters say, will lower costs by as much as 5 percent on those who still pay utilities for standard service. And it will mean that those who stayed with utility electricity sellers do not “subsidize” competition for a relative handful of power customers.

Since retail competition was initiated, only about 8 percent of residential customers have left traditional utilities to negotiate their own contracts, said Rep. Vickie Nardello, D-Prospect, co-chair of the Energy and Technology Committee, with the vast majority remaining in standard service - but also paying the costs built into those standard service rates to cover the potential departure of customers into the competitive market.

”This isn't real competition,” Nardello said. “Why should an entire group of people pay more for a few people that have choice?”

The bill would end retail choice in electricity service for those customers with a maximum demand of 100 kilowatts or less, including all residential customers who are not yet participating in the competitive market.

It also includes language aimed at allowing major electricity users to sidestep energy re-sellers and negotiate multiyear contracts directly with utilities for power, adding a new level of competition for energy retailers and, supporters say, lowering power costs.

Supporters of the move have assembled a broad coalition, including House Speaker Christopher Donovan, D-Meriden, who helped resurrect the measure after it was killed in committee, and usually divergent groups including the Connecticut Citizen Action Group, the Connecticut Industrial Energy Consumers, the Manufacturing Alliance of Connecticut, the AARP and labor groups.

The state's electricity system is “at the edge of a precipice,” said Attorney General Richard Blumenthal, another supporter of the bill. “Deregulation has been a massive failure. Retail competition has been a farce. Our present system is a costly, baffling bust.”

The bill passed by a vote of 104-38, but it faces a more difficult test in the Senate, where Nardello's co-chair, Sen. John Fonfara, D-Hartford, is expected to try to block the bill from coming to a vote. Fonfara has already blocked the measure once this session, refusing to sign off on a motion to vote it out of the committee. It was resurrected Wednesday as an amendment with the blessing of Donovan, the speaker of the House.

”This effectively will be a rate hike on thousands of residential customers and small businesses, many of whom are struggling to stay in business,” Fonfara said Wednesday evening. “This is not some philosophical exercise. This is reality for people. It could mean some of those businesses closing their doors.”

Opponents call the measure wrong-headed and likely to increase costs on customers, and point to years of high electricity prices under the utilities' monopoly as proof that the reforms of the current proposal won't work.

”If they pass this bill, it will make prices go up,” said Chris Kallaher, the director of governmental and regulatory affairs for Direct Energy, which buys and sells electricity in deregulated markets around the country, including Connecticut's. “There is absolutely no question about it. They want to hand the system over to the same people that gave Connecticut ratepayers billions of dollars of stranded costs, and the highest prices in history adjusted for inflation.”

In a statement, the energy retailer ConEdison Solutions estimated that more than 135,000 customers in the state receive power through some form of competitive supplier and enjoy lower costs than those remaining on standard service.

Not all agree.

Purchasing power on the competitive market makes more sense for large consumers of power, like manufacturers and major commercial users, but little sense for individual customers unused to negotiating long-term power contracts, said state Consumer Counsel Mary Healey, whose nonpartisan office represents the interests of ratepayers. Healey endorsed the legislation.

”They're sophisticated” in their decisions on power contracts, Healey said of large-scale customers. “They have energy managers and they know how to buy and sell in the power market. But Mom and Dad don't.” 
Conn. House OKs restricting electricity choice   
DAY
Posted on Apr 29, 1:59 PM EDT

HARTFORD, Conn. (AP) -- The Connecticut House has passed legislation requiring future residential and small business customers to sign up with one of the state's two major power suppliers.

The amendment passed on a mostly party-line, 103-39 vote, with Democrats in the majority. It now moves to the Senate, where there is strong opposition.

Supporters say the move to restrict electricity choice would reduce rates, but opponents say it's bad public policy and would stifle innovation.

More than 90 percent of residential and business customers now buy power from Northeast Utilities or United Illuminating. Supporters say those customers pay a "risk premium" for allowing a small group to choose small, alternative power companies. They predict rates could drop by five percent.

ESPN Fears Rules Of The Game May Change 
DAY
By Amanda Falcone 
Published on 4/22/2009

Bristol - If tax exemptions are repealed and the state imposes a tax surcharge on corporations and limits tax credits, the country's leading sports network could lose millions of dollars each year.
While Mike Soltys, vice president of communications for ESPN Inc.'s domestic networks, said he is confident that ESPN would not abandon its birthplace in Bristol, he said the budget decisions state lawmakers make this legislative session could affect the company's future.

”We would prefer to grow in Central Connecticut,” said Soltys, a Southington resident, adding that over the last 10 years, the number of Connecticut ESPN employees has doubled, as has the number of acres ESPN owns in Bristol.

ESPN, a subsidiary of the Walt Disney Co., employs 3,400 people in Connecticut, and the company has 115 acres in Bristol. It also leases property in Cheshire and owns property in Southington.

But despite ESPN's best intentions, Soltys said, operating costs play a role in determining where ESPN expands. If lawmakers make it harder to do business in Connecticut, he said, ESPN might choose to explore other options. The company owns property and has studios and offices in several states.

With the help of the lobbying firm Levin, Powers, Brennan & Shea LLC, ESPN is hoping to show lawmakers how important it is to Connecticut. State lawmakers have a standing invitation to meet with ESPN staff and tour the Bristol facilities.

”What we are doing is educating,” said Mark Brennan, the lobbyist who primarily works with ESPN.

It is important for the legislature and the administration to see how the proposed changes would affect businesses such as ESPN, he said.

ESPN's greatest worry is that Connecticut could decide to repeal tax exemptions on broadcast equipment. The company needs to keep its equipment current and taxing the equipment will make that more difficult, Soltys said. The company is also worried about the future of other tax exemptions, including the exemption on media payroll services and on non-cable services, Soltys said. Repealing these exemptions would negate some of the film tax credit, which ESPN does take advantage of, he added.

The proposed 30-percent corporation tax surcharge also worries ESPN, as does the Democrats' desire to reduce the limit on the total value of corporation tax credits from 70 percent of a company's tax liability without the credits to 65 percent for next fiscal year and to 50 percent for fiscal years 2010 and 2011.

While Soltys says the company would lose millions of dollars if some of the proposals are enacted, he would not compare what ESPN would lose to the company's overall budget. ESPN and Disney declined to release the company's operating budget figures.

Fred V. Carstensen, director for the University of Connecticut's Center for Economic Policy Analysis, suspects the impact would be tiny, in part because ESPN was the main beneficiary of a change in corporate tax law in 2000. Companies such as ESPN may determine taxable income based on the ratio of their gross receipts from sales in Connecticut to total receipts from all sales, allowing companies with lots of property and employees in Connecticut to pay lower taxes if most of its sales are outside of the state.

Even though it is giving ESPN a tax break, the state still comes out ahead, Carstensen said.

But still ESPN is concerned, and they are not the only business worried about taxes going up.

”What ESPN is saying is very similar to what we're hearing,” said Joe Brennan, senior vice president for the Connecticut Business & Industry Association.  
CT treasurer authorized to borrow $700M 
DAY
Posted on Apr 17, 3:15 PM EDT

HARTFORD, Conn. (AP) -- The State Bond Commission has authorized Connecticut's treasurer to sell up to $700 million in bonds to raise cash to pay off this fiscal year's bills.

Gov. M. Jodi Rell says payments to local school districts are the largest bill due at the end of the month. And considering the state is still waiting for some federal stimulus payments, she says money from the bond sale will likely be needed.

State Treasurer Denise Nappier is calling the bond sale a "safety measure" in case the state finds itself in a cash squeeze before the fiscal year ends on June 30.

Rell says new figures show revenue from the personal income tax are down from last year. While sales taxes are also down, there's some slight improvement from the last few months.
Economists Send Up Red Flags On Dems' Tax Plan
The Hartford Courant
By LYNN DOAN
April 16, 2009

With the state's three-year budget deficit forecast hovering between $6 billion and $9 billion, Democrats are pushing a tax plan that economists warn will wipe out thousands of jobs both in old-line and emerging Connecticut industries.

The tax package unveiled by the state legislature's Democratic majority earlier this month includes three main hits to business: a 30 percent surcharge on the corporate earnings tax; an end to sales tax exemptions on some key purchases such as computer services; and stricter limits on tax credits, including the lucrative research and development credits that keep many startup businesses afloat.

While the higher taxes would help keep the state above water and could avert public employee job cuts, economists and business executives say the plan would also exacerbate mounting layoffs in a deep recession and drive out companies that many see as the future of Connecticut's economy.

"I don't have numbers in my computer that are going to tell me what this is going to do to jobs, but I know it's not good," said Nicholas S. Perna, economic adviser for Webster Bank and a lecturer at Yale University. "You're either going to discourage companies from staying in Connecticut by putting a surcharge on them when profits are very hard to come by, or you're going to discourage them from relocating here."

No one, in fact, has complete numbers on estimated job losses or even on exactly how much the Democrats' proposal would raise in new revenue from business.

The state is expected to collect $315 million in the next three years from the corporate earnings surcharge and $79.5 million annually from the 54 tax exemptions that would be repealed — although some of those exemptions apply to consumers.