CONNECTICUT BUDGET DEFICIT ... AND THE PROCESSES ...

Budget Negotiations Break Down as Republican Proposals to Streamline Government are Summarily Rejected

HARTFORD – Senate Republican Leader John McKinney (R-Fairfield) and House Republican Leader Lawrence F. Cafero, Jr. (R-Norwalk) today announced that legislative Republicans will not participate in future negotiations to close the FY11 budget deficit. During a Friday night meeting with Governor M. Jodi Rell and Democratic legislative leaders, the Republican leaders were presented with two proposals to close the FY11 deficit, neither of which incorporated any of the cost saving measures included in the Republican plan offered on April 15. "I’m afraid that the news of some extra revenue has given license to the people in charge of our state to forego any effort to rein in out of control spending and make the structural reforms our government desperately needs," said Senator McKinney, referring to the recent news that state tax revenues are up $400 million over previous estimates. "Republican legislators have long viewed this fiscal crisis as a wake-up call and an opportunity to make long-term structural changes to reduce the size and cost of our state government. Neither of the proposals we have been presented with accomplish those goals." "It is unfortunate that we have been forced to abandon negotiations with the Democrats and Governor Rell on the budget. But there was no possibility to even discuss any of the myriad of options we have put forth: agency consolidations, voluntary retirement, a smaller government that we can afford, structural changes in the way we do business as a state – changes that could save hundreds of millions of dollars," said Representative Cafero. "The big losers are state taxpayers, I’m not sure there were any winners.’’ Legislative Republicans put forth a balanced budget proposal on April 15th that achieved $736 million in savings. Highlights of the proposal include: The hallmarks of the savings: $58 million in line item cuts lowering spending to 2009 levels; $64 million in early retirement for state workers; $10 million in state agency consolidations; $6.4 million to shed state office leases;  $20 million in privatization of state functions; $150 million in state worker concessions, including wage freezes, furloughs and health care adjustments; $3.8 million in legislative pay cuts and the elimination of franked mail and travel. The budget also makes significant investments in job creation and retirement security: Appropriates $200 million in previously cancelled contributions to state employee pensions; Eliminates of the Business Entity Tax to save companies $32 million; Creates a Small Business Revolving Loan Fund of $25 million; Makes available tax credits of up to $17.5 million for companies that hire off unemployment rolls. Senator McKinney said he was hopeful that public pressure would persuade state leaders to change their course and reengage in negotiations that involved real structural changes to government. He warned, however, that even if the final product put forward by Democrats does not include tax increases, it can not necessarily be championed as a victory. "We need to remember that we are making adjustments to a budget that already raised taxes $1.2 billion on Connecticut families and businesses," he said. "The proposals we have seen make no effort to reduce those massive tax increases." Office of Fiscal Analysis ... http://www.cga.ct.gov/ofa/