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Rell, Democrats Reach Budget Deal

Christopher Keating

May 05, 2010

Republican Gov. M. Jodi Rell and Democratic leaders have reached a deal on a $19 billion budget that does not raise any additional taxes in an election year.

The legislature was scrambling late Tuesday night to finish the final details of the budget for the next fiscal year — a budget that relies on federal stimulus funds to close more than half of the remaining deficit.

The state House of Representatives could debate the bill as early as this morning. The bill is being praised by Democrats and harshly condemned by Republicans.

The measure, which had not been unveiled in full at the state Capitol, would erase a projected deficit of $700 million for the next fiscal year and replace it with a modest surplus of $10 million. Overall, lawmakers are expecting $365 million to come from federal stimulus money — cutting the deficit by more than half.

Rep. John Geragosian, a New Britain Democrat who co-chairs the budget-writing committee, said a series of budgetary moves will create small surpluses in the current and next fiscal years despite the worst economic downturn in decades.

"I think it's amazing — without having to raise any taxes," said Geragosian. "We're not happy with everything in it, but we're happy with the outcome."

While there are no additional taxes for fiscal 2011, the legislature had already raised taxes for the upcoming year through increases in the state income tax on millionaires and a 50 percent increase in the state's cigarette tax.

As Democrats were pleased about striking a deal with Rell, House Republican leader Lawrence Cafero of Norwalk ripped the plan as business as usual. The GOP alternative calls for privatization of state services, consolidations of multiple agencies, and $150 million in union concessions that some say is unrealistic because the concessions have not been negotiated yet with the unions.

"They do absolutely nothing to cut into the structural deficits that we know exist in 2012, 2013 and 2014," Cafero said of the Democrats' budget, adding that it has "not one bit of privatization."

A major part of the Republican plan involves raising an estimated $800 million by selling the state-owned Bradley International Airport in Windsor Locks and the underused Brainard Field in Hartford off I-91. The state would form a quasi-public agency to oversee the airports like a port authority.

"It's an international airport," Cafero said. "We have no international flights. Hello?"

By selling the state-owned airport, Cafero said, the state would no longer be responsible for expenses like plowing snow, maintenance, staff and electricity to run air conditioning in the gigantic terminal.

Cafero said the $800 million estimate for two airports is actually conservative, saying Midway Airport in Chicago could have sold for as much as $2.5 billion in September 2008 before the sale fell through.

"We shouldn't be in the airport business," Cafero said. "Let's get out of the business. Let's get money for it. ... If they could build that thing up [at Bradley], the economic development it will generate will far exceed the revenue, frankly, lost that we're realizing now."

In 2006, 2007 and 2008, Bradley had operating losses ranging from $3 million to $9 million. Despite those losses, the Republicans say the airports could still sell for a high amount.

But Democrats scoffed at the Republican estimates on the airports, saying they are unrealistic.

"If their numbers were anywhere close to real, the governor would be playing with them," a Democratic insider said.

That was a reference to a Saturday afternoon press conference by Cafero and Senate GOP leader John McKinney of Fairfield, who were joined by more than 30 Republican legislators in saying they would no longer participate in the budget process because they had been frozen out. The Republican ideas were rejected, and GOP lawmakers thus decided to offer their alternative plan that involves selling the airports.

The Democratic plan calls for reducing borrowing, in a process known as securitization, by $301 million, according to details released to legislators. The bill also calls for more than $35 million in various "fund sweeps" that involve taking money from various accounts and shifting them into the general fund, which has a large deficit. Lawmakers and staffers are crafting a gigantic bill that includes all items, including the fix to ensure that the judicial branch receives adequate funding.