State Faces Daunting Issues In Legislature

January 1, 2007
By CHRISTOPHER KEATING, Capitol Bureau Chief

Skyrocketing electric rates. Universal health care. Correcting problems within the state police. Car taxes.

The menu of difficult issues confronting the new General Assembly beginning this week is daunting, even to veteran lawmakers.

"I've been a state senator since January of 1993," said Donald Williams, the state's highest-ranking senator, "and I can't remember going into a session where the issues were as challenging or as important as in 2007." Williams will be president pro tem of the state Senate.

Of 151 members of the House of Representatives, 107 are Democrats, more than in at least 30 years, and there are enough Democrats in both chambers to override the Republican governor's vetoes. Despite their new firepower, however, Democratic leaders have pledged to work with Gov. M. Jodi Rell in a year that many say will be difficult.

Lawmakers concede that they do not have easy or inexpensive answers to some of these more complex issues, noting that energy deregulation and universal health care would have been solved long ago if there were simple solutions.

Here are some of the thorniest issues lawmakers will grapple with during the five-month 2007 session, many of which could have a direct and profound effect on the lives of state residents.

Car Taxes

Although Rell's attempt to eliminate personal property taxes on automobiles went down in flames during the last legislative session, she may try again.

Rell won't present her budget proposals until February, but she has said she won't back down from her signature tax-cut proposal.

"We would end up doing pretty much what we did last year, and that is to exchange one tax credit for another - provided those numbers come out relatively even," she said.

Democrats are already knocking the idea, saying the chief beneficiaries would be rich people with multiple very expensive cars. But Rell still portrays the issue as one of fundamental fairness, saying that two people driving the same model car should not pay far more in Waterbury than in Greenwich, where property values are higher and tax rates are lower.

House Speaker James Amann has opposed the idea ever since an earlier version was proposed in 1994 by then-state Sen. James Maloney of Danbury.

"In my opinion, to be quite clear, the governor has more important things to discuss with me than rolling out that phony-baloney car tax again," Amann said. "It's just one pocket to the other pocket. Listen, in Waterbury, that car-tax [elimination] is a good place for that. There's no doubt about it. In Bridgeport, it's probably a great tax [cut]. But 62 or 63 communities benefit, and more than 100 don't, and that's the problem.

"If the governor has some secret plan that I haven't seen yet that she's going to roll out that pays for this program without stealing from the existing property tax, then I'm more than willing to listen."

Electric Rates

Connecticut has some of the highest electric rates in the nation, and they are on the verge of soaring even higher. The legislature has been unable to develop a comprehensive electric policy in large part because the issue is so complicated, and so many competing interests are vying to get their way. No action was taken during the last legislative session, and no special session was called this fall - though lawmakers knew about approaching rate increases.

Some insiders say only a relative handful of lawmakers completely understand the issues.

"It's a foreign language to most people - the language of energy and deregulation," Williams said.

Many legislators now think their decision to deregulate the electricity industry in 1998 was a failure because the promises of retail competition and lower rates haven't come to pass. Prices were held down only temporarily. At this point, Connecticut Light & Power Co. customers will see an average increase of 7.7 percent starting Jan. 1, while customers of United Illuminating, which serves the New Haven and Bridgeport areas will see a 50 percent increase by the summer.

"December has been a cruel month for the ratepayers of Connecticut," Rell said. "Come January, with the start of the legislative session, real, substantive changes need to be made to our energy policy."

One idea being pushed by Senate Republicans is a freeze on the gross-receipts tax that utility companies pass along to consumers, which would save homeowners $5 to $10 on their monthly bills. Total estimated savings for six months would be $100 million. But Democrats, who rejected a similar idea by Rell on a smaller scale during the last session, say the tax freeze would be of little help to homeowners.

Health Care

Rell last week offered a version of a universal health care program, one that she said would require no state money. But it would depend on finding at least several health insurers willing to provide broad benefits for $250 a month or less for one person. Some people worry such a plan could leave people with sizable out-of-pocket costs.

Although many Democrats have talked about adopting universal health care, Amann cautions that this is a lofty goal for such a complicated issue. Since solving the entire problem is unlikely, the legislature should instead focus on solving one part of the problem, he said.

"If you think we're going to conquer the world next year and get everybody covered, it would be a miracle," Amann said before Rell announced her plan. "I'm sure the governor would love to sign that bill. I think if we concentrate on the kids with a program we have called HUSKY, which is one of the best in the nation, improving that and creating more access and more prevention, we can at least conquer that [this] year."

Education Funding

How much the state should pay for public education is an annual debate in the legislature, but this year the price tag could be breathtaking. Already, a state commission formed by Rell has recommended pumping an extra $1.2 billion annually into public schools - a 75 percent increase in the state's major school aid grant. Such an increase would be phased in over several years but would ease the burden on local property taxes and make the school aid formula more equitable, according to the commission.

Lawmakers will weigh that proposal against other requests to support education, including a state committee's recommendation for a $100 million increase over the next two years to bolster preschool classes and other early childhood programs.

Public colleges, too, are seeking more money to keep up with growing enrollments, and the Board of Governors for Higher Education is seeking a $3.2 million increase in state-funded student scholarships.

Budget and Taxes

Rell said she is trying to spread the word that the legislature must be cautious on spending, even though the projected budget surplus for the current fiscal year has barreled past $500 million. The coffers are full now, but deficits are projected starting next year if the state keeps increasing spending at its current rate.

"I spoke with the speaker, and he actually said to me, `Keep repeating it,' because people need to understand that, long-term, we're looking at a potential deficit if we don't change anything as far as current services," Rell said.

Amann, meanwhile, rejects the notion that Democrats have been renegade spenders. Members of his party have abided by the state-mandated spending cap, he said.

Meanwhile, Martin Looney, Senate majority leader and a longtime advocate for an earned income tax credit for the working poor, says Democrats will push again for that tax relief. The plan was scuttled last year in a stand-off with Rell.

State Police

Some legislators are likely to seek more funding for the state police. The department came under a scathing indictment by the Connecticut attorney general and New York State Police for failures in its internal affairs department. The unit, which many think is understaffed, has been accused of lax management; critics say many complaints by citizens did not get properly investigated.

A recent 207-page report outlines one instance in 2004 in which an unnamed trooper was riding in a car driven by his longtime girlfriend when he allegedly struck her in the face, "pulled out a clump of her hair and ripped an earring out of her right ear, causing minor bleeding."

The trooper was never disciplined. The report said, "this case is one of the clearest examples of the way some CSP command staff and supervisors disdain internal investigations and abdicate their responsibilities for directing thorough investigations" and holding troopers accountable.

Play or Pay

Large companies such as Wal-Mart have been criticized for failing to provide adequate health coverage for employees, prompting some liberal lawmakers across the country to try to impose a tax on them. A study in Connecticut showed Wal-Mart having the highest number of employees who received coverage from the state.

The issue has lost some momentum here, however, after strong lobbying by the Connecticut Business and Industry Association, and the chances for passage of a tax on Wal-Mart do not look good.

Dealing With Rell

With two years' experience in leadership and veto-proof majorities in both chambers, the Democrats intend to set the agenda by tackling universal health care, electric rates and regulation and education-aid and property-tax reform.

"I would not want to raise expectations too high, but there certainly is a new dynamic," Williams said. "In addition to having a two-thirds majority in the Senate, we now have well above a two-thirds majority in the House. That automatically changes the landscape."

But Williams said the Democrats are not starting the session with a view toward combat with the Republican governor.

"It doesn't mean we'll simply roll over the governor on issue after issue. We'll reach out to the governor," he said.

"I think of necessity there will be a climate change in terms of negotiations."