While there were no promises of tax rebates or special programs aimed at kick-starting Connecticut’s economy in Gov. M. Jodi Rell’s new budget plan, she promised to work with lawmakers on an economic stimulus package.
But the Republican governor urged the Democrat-controlled legislature to remain fiscally prudent, even though the state is in good financial shape. Some neighboring states are experiencing budget deficits and there are fears the federal economy is in recession.
“We cannot spend what we do not have,” Rell warned a joint session of the General Assembly on the opening day of the new legislative session.
Her budget chief Robert Genuario ruled out the idea of spending some of the budget surplus for tax rebates to piggyback with proposed federal tax rebates. Estimates of the state surplus vary from $263 million to $160 million.
“It really, in my view, would not be appropriate to take money that isn’t in the door yet and spend it. What the citizens of this state need more than anything else is stability,” Genuario said. “Now is not the time to get silly.”
Instead, Rell’s budget offers a handful of smaller tax changes. They include resurrecting a plan for a local property tax cap, eliminating a $250 business entity tax paid by 100,000 businesses, exempting working farms from the estate tax and extending state sales tax exemptions for energy efficient appliances.
“The governor has put many things forth in her budget. The Democrats have done the same. The Republicans have done the same. And that’s our job,” said House Minority Leader Lawrence J. Cafero Jr, R-Norwalk. “This is the start of it. Let’s roll up our sleeves and see what we come up with.”
But Senate President Donald E. Williams Jr., D-Brooklyn, said he still plans to schedule a vote on a stimulus package early this session that could include ideas such as a larger property tax credit against the income tax and mortgage relief for troubled homeowners.
“Families are having tough times. That’s exactly why we need to act now,” Williams said. “It’s nice to have ideas that will take effect six months from now, a year from now, two years from now. But to have the greatest impact on the economy and most importantly helping Connecticut’s families, we need relief now, and we need to pass it now.”
Senate Minority Leader John McKinney, R-Fairfield, said he believes legislators and Rell will ultimately agree on a stimulus package in the coming weeks.
“I’m happy that we’re in the first day of session and Democrats and Republicans are talking about tax relief. That hasn’t happened in my memory,” McKinney said.
This year’s legislative session runs until May 7.
The governor and state lawmakers last year passed a two-year, $36 billion tax and spending plan that covers the new fiscal year beginning July 1. But they typically make changes to the second year of the biannual budget.
Rell’s proposal is for an $18.5 billion one-year budget, about $89.3 million more than the version approved last year. Genuario, billing it as “a conservative budget,” said about $20 million in spending approved last year has been cut from Rell’s new version, including some Medicaid programs.
Overall, the budget increases spending over the 2007-08 budget by 4.8 percent.
One of Rell’s biggest proposed changes is overhauling the state Department of Transportation, which has been the subject of a federal criminal investigation. She wants to separate the agency and create a Department of Highways and a Department of Public Transportation, Aviation and Ports.
“DOT as an institution has simply become too bureaucratic, too inefficient and too single-minded in its problem-solving approach,” she said.
That proposal received rave reviews from both Republicans and Democrats, who gave her a hearty round of applause.
Her proposed budget also includes funding for criminal justice reforms, along with 125 additional corrections officers and 100 more state troopers over five years for traffic enforcement. She also proposes barring convicted sex offenders from legally changing their names and requiring them to have a special imprint on their driver’s licenses.
“The more the public knows, the better protected they and their children will be,” she said.
Rell’s budget includes more money for tourism and arts programs to preserve Connecticut’s “special heritage” and the promotion of nanotechnology to boost manufacturing and biotechnology in the state. There’s also more funding for state parks, oversight of nursing homes, and psychiatric care for people who use hospital emergency rooms.
Much of Rell’s budget speech touched on legislative proposals she plans to submit this session. They include requiring all buses to limit unnecessary idling, imposing tougher teen driving restrictions, and creating a three-strikes law for convicts with three violent felony offenses.
