Two of the most powerful political leaders in the state – Republican Gov. M. Jodi Rell and House Speaker Chris Donovan – squared off Tuesday over the state budget and the Democratic-controlled finance committee’s votes to close Connecticut’s huge budget deficit.
They specifically clashed over the complicated borrowing process known as “securitization,” which is mandated in the state budget to fill a hole of $1.3 billion in the 2011 fiscal year.
Rell wanted to securitize the proceeds from legalizing the keno electronic gambling game, but the committee instead decided to borrow against a surcharge on electric bills.
Rell said the “proposal to securitize revenue from charges on consumers’ electric bills is not the solution I would pursue. Ratepayers, who have paid these charges for the last 10 years, have rightfully been expecting the charges to soon be expiring – by the end of this year for Connecticut Light & Power customers and in 2013 for United Illuminating customers.”
Rell added, “Some sort of securitization is necessary. This option, however, is the least desirable for Connecticut’s beleaguered families.”
But Donovan took issue with those statements, saying Rell was the one who wanted to securitize in her own budget proposal.
“It was the governor’s proposal to securitize $1.3 billion,” Donovan told Capitol Watch. “I think she’s being less than truthful with the public. … For her to criticize it is disingenuous.”
He added, “I’m disappointed in her rhetoric. Her rhetoric is less than truthful.”
In the crafting of the budget last fall for the second year of the two-year plan, a request for securitization was used as a placeholder to fill the $1.3 billion hole. The exact way of how the money would be borrowed would be determined later – which is now.
“The Republicans and the governor wanted to borrow,” Donovan said. “We went along with the governor. … We did a variation of what she proposed – a slight variation of what she proposed.”
Democrats said several times Tuesday that the move was not a rate increase for electric customers.
“It’s funds that the ratepayers are paying,” Donovan said. “It’s a phase-out, but we’re grabbing some of it.”
Overall, the plan calls for using 56 percent of the current surcharge, which was supposed to be phased out to zero.
Donovan was surprised at Rell’s comments, which were issued by her press office.
“Her staff was happy with our proposal for securitization,” Donovan said.