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Governor Gives Her Final State Of The State Address

CHRISTOPHER KEATING

February 04, 2010

HARTFORD — - Gov. M. Jodi Rell called for a new era of political civility Wednesday as she offered an $18.91 billion, no-tax-increase budget that includes the legalization of keno electronic gambling and provides loan guarantees to spur small businesses to create jobs in a sluggish economy.Saying that the cash-strapped state needs to close its current budget deficit and prepare for larger deficits in the future, Rell said in her final State of the State address that this is not the year for grandiose, big-spending plans. Instead, her budget calls for essentially flat funding for the largest items in the budget, such as money for nursing homes and aid to cities and towns.

Rell wants to avert a repeat of the nearly yearlong clashes last year that prompted the longest budget battle in state history and ended with an exasperated Rell allowing the budget to become law without her signature. This year, she said, the sniping needs to end and leadership needs to begin.

"We need to stop the game-playing and name-calling and constant bickering that has come to consume too many at the Capitol," Rell told legislators in the historic Hall of the House. "None of us are blameless in this regard. All of us must accept our responsibilities to treat one another with respect and to listen."

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During a 28-minute speech that was interrupted by applause 13 times, Rell said that voters are looking for action and new jobs at a time when the state unemployment rate has reached 8.9 percent.

"They don't want to hear shallow lamentations of sympathy or understanding from their elected officials," Rell told the standing-room-only crowd. "They want action and assistance. And they want an end to the theatrical histrionics of political press conferences and partisan pinball. They want us to act like adults."

'Much Work Remains'

In an attempt to save money at a time when the state budget deficit has reached $500 million for the current fiscal year, Rell called for a 24-member, bipartisan commission to study the bureaucratic streamlining of all three branches of government. But Democrats immediately rejected the idea as two years late and duplicative of many past commissions.

"We already have measures to streamline government," said House Majority Leader Denise Merrill, a Mansfield Democrat. "I don't see it. She runs the executive branch. It's up to her to streamline the agencies."

In her speech and in budget documents, Rell focused only on adjustments for the second year of the two-year budget. She did not provide a plan to close the current year's deficit, but a plan is expected later this month.

Because Rell is not seeking re-election, her speech marked her final budget address to the General Assembly. In her low-key style, she spent relatively little time on nostalgia. But she mentioned in her remarks that her husband, Lou, and son, Michael, were sitting in the House chamber as her daughter, Meredith, was watching streaming video from her home in Colorado. Rell briefly recapped her proudest achievements: ethics reform, civil unions, the Charter Oak health insurance program, new charter and magnet schools, and open-space preservation, among others.

"There is no time for reflection, however, for much work remains ahead, and much history is yet to be written," Rell said.

With Rell out of the race, 13 candidates have stepped forward to seek the toughest political job in the state. Many were in the chamber Wednesday — the Democrats trashing her speech and the Republicans soft-pedaling any criticisms.

Simsbury First Selectman Mary Glassman, who is seeking the Democratic nomination, said she was "extremely disappointed" by the speech because it contained nothing on affordable housing or improving education.

"It's not acceptable to have a governor who puts the state on autopilot," said Glassman, who previously worked at the Capitol as an attorney in the House and in the Senate.

HARTFORD — - Former Stamford Mayor Dannel Malloy, a Democrat who ran for governor in 2006 and is running again this year, said the state is drowning in "a sea of red ink" on a day when Rell was wearing red in front of the crowd in Hartford.

"It's a little too little and a little too late," Malloy said, adding that it makes little sense for Rell to create a commission on government efficiency as she's heading out of office.

But House Republican leader Lawrence Cafero of Norwalk, one of Rell's strongest defenders, said that neither gubernatorial aspirants nor lawmakers had solved the state's ongoing budget problems, either.

"I haven't heard a thing from one Democratic candidate for governor, and Mr. Malloy has been running for four years," Cafero said. "There are two things we have to focus on like a laser beam, and that's jobs and getting state finances in order."

A Game Of Keno, Anyone?

In proposing adjustments to the second year of the two-year budget, Rell repeated some of her previous ideas and also came out with some new ones. Among Rell's most controversial proposals is a plan to launch keno gambling in the state, which she estimates would generate $20 million in its first year — it would not be in operation for the full year — and $60 million in subsequent years.

Rell raised the idea of the electronic gambling game last year, but it was dropped without a vote by the Democrat-controlled legislature. Attorney General Richard Blumenthal issued a legal opinion that allowing keno could violate an agreement between the state and the two tribal-operated casinos in Connecticut and said it might prompt the casinos to withhold the state's share of their slot-machine revenues. The state's share peaked at more than $430 million in 2007, but the total has dropped sharply to an estimated $371 million for this year.

Insiders said that the Rell administration had not engaged in detailed talks with the casinos about the keno plan, but Rell's budget director, Robert Genuario, said he did not envision any problems.

"We believe the keno proposal is consistent with the compact," Genuario said.

Although Rell is seeking money from many sources to balance the budget, she rejected the idea of allowing the sale of alcohol in package stores and supermarkets on Sundays. The Connecticut Package Stores Association has fought for years against the proposal, but liquor wholesalers have been pushing the idea recently in a perennial battle at the Capitol.

"The governor is not a proponent of Sunday sales. Period." Genuario said.

Rell wants to save money by deferring a payment of $100 million into the state employees' pension fund, but critics say that move will save no money in the long term because no one's pension will be decreased. She is also seeking to eliminate the Permanent Commission on the Status of Women and other commissions in a move that has been rejected in the past.

One of the centerpieces of Rell's plan is an effort to assist small and medium-sized businesses, which Genuario called "vital to our economy." The governor is proposing using $100 million in state bond funds — matched by $400 million from banks — to establish a low-interest loan pool that is designed to help businesses that are unable to obtain credit.

The Connecticut Credit Consortium would allocate $75 million to provide loans of $500,000 to $3 million to all businesses, while $25 million would be set aside for direct loans of up to $500,000 to small and medium-sized businesses.

The consortium is a good idea given that revenue is down, costs are up and profits are gone, said state Banking Commissioner Howard Pitkin.

"It's a vital place to start," he said, noting that the program would help borrowers qualify for loans.

Another initiative is designed to foster research and development in "green industries." Rell is proposing a loan forgiveness program for students who earn degrees in "green technology," life sciences or health-related information technology. Students who take advantage of the program must remain in the state after graduation and work in one of those three fields.

Magnet and charter schools would also receive $5 million in additional funding under Rell's plan, and the Shoreline East commuter rail line would get an additional $1.6 million to expand service to New London. But people on Medicare will see their monthly Part D maximum co-payments rise from $15 to $20 for prescription drugs, a change expected to save $1.1 million.

In another move that was questioned by Democrats, Rell wants to make it easier for herself and future governors to make budget cuts when there is a projected deficit. The governor can currently cut up to 3 percent, and up to 5 percent in various accounts, without requiring approval by the legislature. Rell's plan calls for doubling her authority under certain circumstances and tripling it if the deficit skyrockets to 5 percent or more of the state's general fund.

Although Democrats question giving Rell more power, Senate Republican leader John McKinney of Southport and Sen. Dan Debicella of Shelton support the idea, which the GOP has favored in the past.

House Speaker Christopher G. Donovan, D- Meriden, said that legislators and the governor should work together to determine cuts, rather than giving more power to the governor.

To Kill A Bond

Donovan is also hesitant to fully agree with Rell when it comes to bonding. Rell wants to automatically repeal bond authorizations that have not been awarded by the State Bond Commission — which is controlled by the governor — within five years.

Currently, once bond requests are authorized, they stay on the books indefinitely. Donovan notes that his hometown of Meriden has been waiting for years for about $10 million for a flood control project in its downtown area, but requests have not been brought before the bond commission.

Greenwich multimillionaire Tom Foley, a Republican running for governor, said that Rell's budget proposal was a good start, but that she should have focused more on reducing spending. The results of the streamlining commission will come too late, he said, adding that Rell should have looked to reduce expenditures by at least $1 billion for the next fiscal year.

Repealing or putting off the public financing of campaigns would have helped her do that, Foley said. She also should have taken a harder look at Medicaid costs, he said.