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Governor Proposes To Reshape Government

CHRISTOPHER KEATING, MARK PAZNIOKAS and RINKER BUCK

February 05, 2009

Faced with the state's worst fiscal downturn in decades, Gov. M. Jodi Rell offered a no-frills budget Wednesday that would eliminate agencies, raise fees, close 81 local probate courts, encourage regionalization and cut more than 800 state jobs.

The far-reaching fiscal plan calls for a reshaping of state government, including eliminating or consolidating 23 agencies and 70 commissions because Rell believes that they are no longer affordable.

The largest proposed cuts in state programs in years have been prompted by the massive downturn on Wall Street that has led to unprecedented deficits of $1.35 billion in the current fiscal year and as much as $8.7 billion over the next two fiscal years.

Rell is proposing to close the budget gap in three ways — collecting $2 billion over three years from President Barack Obama's federal stimulus plan, cutting expenses by $2 billion, and spending the entire $1.4 billion "rainy day" fund for fiscal emergencies. In addition, she is expecting $570 million over two years in concessions from state employees, and she would raise about $260 million over two years from fee increases for more than 1,000 separate licenses and permits. That includes everything from driver's licenses and car registrations to liquor permits and commercial fishing licenses.

Even with the cuts and fee increases, Democratic legislators said that Rell's $18.84 billion budget could be short as much as $2.6 billion over two years because the legislature's nonpartisan fiscal office is assuming lower tax collections than Rell projects.

Rell established the tone and set the table for the coming public hearings and budget negotiations that will take place in the legislature over the next four months. Insiders do not expect a final budget agreement until early June, and some have predicted that the faltering national and state economies will keep lawmakers at the Capitol into the summer.

In a 26-minute speech that was interrupted by applause 23 times at the state Capitol, the Republican governor told lawmakers that she was forced to eliminate commissions and agencies because the state no longer has the money.

"Simply put: the bloat of bureaucracy is no longer affordable," Rell told lawmakers. "Over the years, over the decades, state government often lost sight of what its core mission was and who it was serving. ... It is time to get back to basics."

The two highest-ranking Democratic leaders in the House — Speaker Christopher Donovan of Meriden and Majority Leader Denise Merrill of Mansfield — said they were concerned that the budget places unfair burdens on senior citizens and families who will be forced to contribute higher co-payments for state health services, and on public college students who will be facing higher tuition.

"I don't see where wealthier people have paid any kind of price in this budget," Merrill said.

How Large The Gap?

Since Wall Street started falling last fall, mayors and advocates who rely on the state budget for their funding have feared that their budgets could be cut by as much as 20 percent. They were relieved Wednesday. The key educational grants that go to cities and towns will remain at the same level as this year, and nonprofit agencies will be "level-funded" for each of the next two years.

Rell's budget chief, Robert Genuario, said that nursing homes would also receive the same amount as this year. But advocates for the homes said that the industry would actually suffer a cut because it will not receive an expected rate increase that had been scheduled under current law.

One of the first battles will be over a fundamental disagreement about the exact size of the budget deficit. Rell's budget office created the plan by projecting a deficit of $6 billion over the next two years, but the legislature's fiscal office has a more pessimistic view of the economy stretching out over the next 30 months.

"Unfortunately, [Rell's proposal] addresses the budget picture of about three to six months ago, so there is going to be much more to do," said Senate President Pro Tem Donald Williams of Brooklyn. "I was pleased that she is incorporating a number of ideas that we talked about before, like regionalization for our cities and an expanded bottle bill."

Genuario, though, said that both fiscal offices were looking at the same data.

Senate Majority Leader Martin Looney, a New Haven Democrat, was not impressed with Rell's proposal.

"It's another partial deficit mitigation plan, rather than a comprehensive budget," he said.

But House Republican leader Lawrence Cafero of Norwalk said it was remarkable that Rell had offered the first decrease in the state's general fund in decades.

"It was an extraordinary speech for an extraordinary time," Cafero said.

'College' Surprise

One of Rell's surprises was to call for the creation of a "middle college system." This would consolidate technical high schools and community colleges to train more than 10,000 vocational-technical high school students in jobs and provide college credit in such areas as health care, early childhood programs and computer support.

Some liberal Democrats said they were surprised that Rell offered progressive ideas such as the middle college, the expansion of the bottle-deposit bill to cover water bottles, incentives for regionalism and a jobs program that would be modeled after President Franklin D. Roosevelt's Civilian Conservation Corps of more than 70 years ago. With $7.5 million, the program could create several hundred jobs.

At the same time that Rell was offering new initiatives, she was also proposing the elimination of two high-profile watchdog agencies that advocate for residents on health issues and utility rates — the offices of health care advocate and consumer counsel — moves likely to be condemned by citizens' advocates. She also plans to consolidate several departments and eliminate a range of specialized agencies, including the Permanent Commission on the Status of Women.

Child Advocate Jeanne Milstein, who has joined with some legislators in delivering scorching criticism of the beleaguered Department of Children and Families, would see her 10-employee watchdog agency merged into the attorney general's office and be cut to a single employee. Although Rell considers it as a consolidation, Milstein deems it the elimination of an independent, investigatory, oversight agency.

"This proposed action silences the voices of our most vulnerable children," Milstein said.

Rell, though, said that everyone must join together to help the state dig out of its fiscal hole.

"There is pain and sacrifice in this budget, but it is shared pain and sacrifice," Rell told the General Assembly on Wednesday. "We are in this struggle together, and we will need to work together, to lead together, in deed as well as in word."

Other highlights include:

• A dramatic shrinking of the probate court system — from 117 to 36 courts. The courts would be distributed evenly throughout the state.

• The closing of courthouses in Bristol and Meriden.

• A one-year freeze on new construction projects at the University of Connecticut and other public colleges.

Rell is justifying other actions, such as merging the Council on Environmental Quality into the Department of Environmental Protection, as long-overdue efficiencies. She is also planning to save $180 million over two years by various cuts in pharmacy programs, which is sure to raise protests from independent pharmacists.

Diane Randall, the director of the Hartford-based Partnership for Strong Communities, said, "This budget misses the opportunity to use federal funds to both preserve and create new housing — and create new jobs — for the thousands who desperately need both."

The proposed elimination of watchdog agencies is likely to be a hard sell in the legislature. The attempt to eliminate the office of health care advocate comes as the administration is engaged in a long-running dispute with Kevin Lembo, a Democrat who serves as the chief advocate, over the quality of care provided to Medicaid recipients in Connecticut.

"I'm surprised and more than a little disappointed," Lembo said.