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State Lawmakers Return To Capitol, Budget Grind Wednesday

CHRISTOPHER KEATING

February 01, 2010

State legislators battled all last year over the state budget, but they will be back at it when the General Assembly session opens on Wednesday.

Despite increases in the cigarette tax and the income tax on the state's wealthiest residents, the state is still facing a projected deficit of $500 million in the current fiscal year that ends June 30. As part of her annual State of the State Address, Gov. M. Jodi Rell will unveil adjustments Wednesday to the second year of the two-year budget that the legislature passed last year.

The budget battle is not expected to be as intense as last year because the legislature has already made the decisions to spend the entire $1.4 billion "rainy day fund" for fiscal emergencies and about $1.5 billion in federal stimulus money over the two-year budget. In the upcoming session, lawmakers will work to close the deficit for the current year, as well as make adjustments for the new fiscal year that begins July 1.

With the longest-running budget battle in state history last year, it seemed to lawmakers that the session almost never ended. In fact, the regular session and multiple special sessions stretched out in 2009 from Jan. 2 to Dec. 22.

The economy has improved since the depths of the recession and the bottoming out of the stock market last year, and House Speaker Christopher Donovan, D- Meriden, says he is confident about tackling the state's budget deficit. When the stock market improves, Connecticut's richest residents, often from Fairfield County, pour millions of dollars into state coffers. Boom years for the stock market translate into huge surpluses. In bad years, when stock prices dive, deficits can become huge, as they did in 2009.

But because many economists believe the worst of the economic downturn is over, Donovan prefers to be optimistic.

"We can close it," Donovan said of the deficit during a recent interview in his office. "I'm confident in closing that hole."

Jeffrey Beckham, a spokesman for the governor's budget office, said it was "good news" that Donovan is confident about solving the state's budget problems. But he declined to reveal Rell's budget plans in advance of Wednesday's speech. "We're in a confidential, lockdown mode at this point," Beckham said.

Donovan said that one of the chief ways to close the deficit is to postpone a change in the estate tax. The change, which took effect Jan. 1, raises from $2 million to $3.5 million the value of an estate subject to estate taxes. The change means a projected decrease of $76 million in state revenue between now and June 2011.

The legislature, which is controlled by Democrats, voted Dec. 22 to delay the change, but the Republican governor vetoed the measure, and the Democrats did not have the votes to override it. Donovan said the issue needs to be revisited. "It was what the governor wanted," Donovan said. "It was not what we wanted in the budget."

But, Beckham said, it is the budget the Democrats voted for.

When asked if the state income tax will be raised on millionaires again this year, Donovan responded that in addition to delaying the estate tax adjustment, the deficit can be closed by trimming the state bureaucracy and by making sure the administration makes the cuts that are already required in the budget passed last year.

In addition to the budget, the legislature will tackle multiple issues in a session that is scheduled to last just more than three months in an election year. Some insiders believe that the budget deliberations will not be as contentious as last year because lawmakers have an incentive to finish their work so that they have more time to campaign for the fall elections. Traditionally, the legislature has raised taxes only in the first year of the two-year budget in an effort to avoid tax increases in an election year.

Among the other issues facing the legislature:

•Jobs. For the Democrats, job creation will be a priority, and some recommendations from lawmakers might be released as early as Tuesday. •Domestic violence. A group that has been working on domestic violence laws is expected to release recommendations next week, and Donovan said that the legislature will "absolutely" improve those laws this year.

•Seat belts. The General Assembly is also expected to debate whether the state should mandate that public school buses have seat belts. The issue gained prominence when a Rocky Hill teenager, 16-year-old Vikas Parikh, died in a bus crash Jan. 9 on I-84 as he and other students were heading to a weekend kickoff for a robotics competition. After the crash, three of four registered voters surveyed in a Quinnipiac University poll said they favor mandating seat belts on the buses.

Until now, lawmakers have failed to pass 23 bills on seat belts in the past 20 years, but the issue will undoubtedly receive increased scrutiny this year. State Rep. Tony Guerrera, a Rocky Hill Democrat who serves as co-chairman of the legislature's transportation committee, has already proposed a bill that is expected to be debated in a public hearing.

Connecticut could become the seventh state to require seat belts on school buses, and either the state or the local towns would be required to pay for installing the belts.

"If you ask the average person — and I'm an average person — you would say we need seat belts," said Donovan, who ranks among the state's most powerful public officials. "Personally, I favor seat belts, but I don't know the costs."

•Highway tolls. Another major issue is whether the legislature will call for installing tolls on state highways. The issue arose again recently when Simsbury resident Oz Griebel, a Republican running for governor, said he would favor tolls as long as the money collected would be placed into a "lock box" and would be guaranteed to be spent only on transportation improvements. The idea has been raised in the past, but Donovan is not sure whether lawmakers can tackle the matter in a three-month session. "That's a big discussion that I haven't reached any conclusion on," Donovan said.