Senate Democrats break ranks with House on deficit reduction plans

Majority Democrats in the state Senate broke ranks Wednesday with their colleagues in the House of Representatives, announcing they would vote within a few days on their own proposal to close a $500 million-plus shortfall in this fiscal year’s budget.

“The current stalemate is unacceptable,” Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, wrote in a statement. “Democrats must present an alternative and break the log jam.”

Senate Democrats, who hold 24 out of 36 seats in that chamber, warned their House counterparts late last week they would adopt their own plan to close the $518.4 million deficit projected for this fiscal year unless the lower chamber accepted deeper program cuts and limited tax hikes.

“Senate Democrats are working hard on finding solutions to the current budget crisis and will vote on a deficit-mitigation plan that fully balances the current year deficit by the end of this month,” Williams wrote.

Even if the legislature wipes that budget gap off the books before the fiscal year ends in just over three months, a larger, $725.7 million deficit is being projected for 2010-11. And a mammoth $3.88 billion shortfall is being forecast for 2011-12, which involves the first budget the next governor and legislature must craft.

Williams has said his caucus is wary of endorsing major tax hikes this year in light of significant increases adopted last fall, and the prospect of further increases to be considered next session.

Democrats built tax and fee hikes worth a combined $952 million this year and $674 million in 2010-11 into the budget adopted last September. Gov. M. Jodi Rell, criticized the package, particularly the tax hikes, but allowed it to become law without her signature.

Minority Republicans in both legislative chambers have attacked the Democrats, both on last year’s tax increases and on their refusal to impose deep cuts so far this fiscal year,

Rep. Vincent J. Candelora of North Branford, ranking House Republican on the finance committee, said the Democratic stalemate “sends a terrible message. The Democratic leadership in this chamber cannot come up with a viable solution to this budget crisis.”

This criticism hasn’t helped, Williams, said, adding, “Republican legislators are focused exclusively on criticizing proposals from others, not offering solutions of their own,” he said.

Rell, a Republican, offered a deficit-mitigation plan earlier this month, but that proposal drew criticism from House Democrats in particular because of proposed cuts to social services, health care and town aid.

Closed-door talks between Democratic leaders from both chambers broke down Wednesday, sources said, after top lawmakers in the House refused to consider most of the reductions Rell outlined. House Speaker Christopher G. Donovan, D-Meriden, declined to comment Wednesday, but said through a spokesman that the two caucuses have been talking and would continue to do so.

“The speaker’s approach is delay, delay, delay, delay, delay,” one Senate Democrat said privately, questioning whether Donovan’s strategy simply is to leave this year’s deficit unaddressed until the fiscal year ends on June 30, and state government has no choice but to borrow funds. Lawmakers and Rell agreed to borrow more than $1 billion last summer to cover the operating deficit for the 2008-09 fiscal year.

Rep. Cameron C. Staples, D-New Haven, co-chairman of the Finance, Revenue and Bonding Committee, said the threat of Senate Democrats moving forward alone did not help a situation he still hopes can be resolved. “The logic of a single-chamber running a bill is puzzling to all of us,” he said.

Williams’ announcement came on the eve of today’s planned release of the Appropriations Committee’s proposed revisions to the preliminary, $18.93 billion budget adopted last September for 2010-11.

Leaders of the finance committee already have said they are skeptical there will be enough support for the tax hikes that could be necessary to balance the spending the Appropriations Committee is expected to recommend for the next fiscal year.

Though appropriations leaders originally said they expected to propose a bottom line similar to the $18.91 billion spending level Rell recommended in February, sources said Wednesday that the panel could add more than $300 million in additional spending, though most of it would be offset by a comparable increase in projected federal aid.

Rell’s plan also estimated that proposed-but-not-yet-approved changes in the emergency federal stimulus grants could net Connecticut an additional $365 million in 2010-11. Senate Democrats have been eyeing that possible federal aid bonus as a means to reduce the projected shortfall next year, not as a means of supporting additional spending.

Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, declined to discuss specific numbers but said he believes his panel’s plan would reflect most Democrats’ priorities, regardless of whether they serve in the House or Senate. “We are presenting a budget that we think is responsible,” he said. “It is one that maximizes federal revenue, that protects vital services and that doesn’t make cuts that cost us jobs.”