State legislators battled for nearly an entire year over the state budget last year, but they will be back at it again when the General Assembly session opens Wednesday.
Despite increases in the cigarette and income taxes on the state’s wealthiest residents, the state is still facing a projected deficit of $500 million in the current fiscal year. As part of her annual State of the State Address, Gov. M. Jodi Rell will unveil adjustments 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, they will work to close the deficit for the current year, as well as adjustments for the new 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 — a year-long process.
Since the economy has improved since the depths of the recession and the bottoming out of the stock market last year, House Speaker Christopher Donovan says he is confident about tackling the state’s budget deficit. When the stock market improves, the state’s richest residents – often from Fairfield County – pour millions of dollars into the state coffers. In boom years for the stock market, that translates into huge surpluses. In bad years, like after the Lehman Brothers investment bank collapsed and stock prices nose-dived, the deficits can become huge – as they did in 2009.
But since many economists believe the worst of the economic downturn is over, Donovan prefers to be optimistic.
“We can close it,” Donovan said in an interview in his office. “I’m confident in closing that hole.”
One of the chief ways to close the deficit, he said, is to postpone $76 million in cuts in the estate tax that took effect on January 1. The Democratic-controlled legislature voted on December 22 to delay the tax cuts, but Rell vetoed the bill. The Democrats were unable to override Rell when the Senate failed to generate enough votes.
Even after the veto, Donovan said the issue “has to be” revisited because the tax cut was never something that was pushed by the Democrats.
“It was what the governor wanted,” Donovan said. “It was not what we wanted in the budget.”
When asked if the state income will be raised on millionaires again this year, Donovan responded that the deficit can be closed by delaying the estate tax, trimming the state bureaucracy and making sure that the administration makes the cuts that are already required in the budget that was passed last year.
Attorney 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, lock-down mode at this point,” Beckham said.
Concerning Donovan’s statement that the Democrats did not want the estate tax cut in the budget that became law, Beckham said, “They voted for it.”
Besides the budget, the legislature will tackle multiple issues in a session that is scheduled to last only three months in an election year. Some insiders believe 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 in 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.
For the Democrats, job creation will be a top priority, and some recommendations from a working group may be released as early as Tuesday. Another group that has been working on domestic-violence laws is expected to release recommendations next week, and Donovan said the legislature will “absolutely” improve the domestic-violence laws this year.
One of the most high-profile issues will be whether the General Assembly should mandate that public school buses must have seat belts. The issue gained prominence when a Rocky Hill teenager, 16-year-old Vikas Parikh, died after a bus crash on January 9 on Interstate 84 as he and his fellow students were headed to a robotics competition on the weekend. After the crash, three out of four registered voters who were 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 during 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.”
Another major issue is whether the legislature would call for installing tolls on state highways.
The issue arose again in recent days when Simsbury resident Oz Griebel, a Republican who is now 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.