One deficit option gone as longevity bonuses are locked in for senior state workers

Nearly $4.7 million that the state Senate wanted to use to lower the budget deficit is now on its way out the door – in the form of bonuses to senior state employees.

Though longevity payment checks likely won’t be issued until April 23, the funds had to be committed by the end of business Thursday to allow payroll processing to occur on time, according to Comptroller Nancy Wyman’s office.

And Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, accused Gov. M. Jodi Rell of threatening last week to veto his caucus’ deficit-reduction plan in part to ensure her senior level appointees receive their bonuses.

“The governor’s reasons for threatening to veto the deficit-mitigation plan do not make any sense,” Williams said Friday, six days after the Democrat-controlled Senate adopted a plan that would have pushed state government about $13 million in the black this fiscal year.

Before the bill even went to a vote in the Democrat-controlled Senate, Rell vowed to veto it, calling it “woefully short on real spending cuts and burdensomely high on tax increases.”

But the Senate approved nearly $150 million in cuts that hit a wide array of social service, health care and education programs.

It also sought another $21 million in savings from canceling longevity bonuses for non-union workers both this fiscal year and next, requiring an extra furlough day for non-union workers, and by eliminating 21 deputy commissioner posts in the Rell administration starting July 1.

Longevity bonuses are issued twice annually. For non-union workers, the last installment for this fiscal year was worth just under $4.7 million, while the two for 2010-11 total $9.4 million.

“When you look at the cuts we offered, it makes you think.” Williams said. “What’s the real reason she threatened to veto it? It’s to protect the bonuses for her Republican political appointees, and the jobs of her deputy commissioners, who also are political appointees.”

Rell spokesman Rich Harris fired back Friday that three of Williams’ fellow Democrats in the Senate opposed the measure, and the Democrat-controlled House of Representatives hasn’t voted on the plan yet. “It was simply a bad bill and the governor promised to veto it for that reason,” he said.

House Speaker Christopher G. Donovan, D-Meriden, whose caucus largely has opposed further cuts to state government’s social and health care safety net, canceled a planned Saturday vote on the deficit-mitigation measure after Rell made her veto pledge, and has said he first wants to hear her concerns before deciding whether to call another House session.

Donovan’s spokesman, Douglas Whiting, said Thursday that while administration representatives have talked with some of the speaker’s staff about budget concerns, a meeting between Donovan and Rell hasn’t been scheduled yet.

Williams has been trying to arrange his own meeting with Rell, having sent letters to her office Monday and Tuesday. He said Friday there has been no answer. “It’s as if no one is at the helm,” he added.

The governor, who was on vacation in Colorado Monday and Tuesday and spent much of her first two days back assessing flood damage across the state, always has made her budget director available to legislative leaders at a moment’s notice, Harris responded. “Bob Genuario’s been there every single day,” he said. “He’s ready to respond to them 24/7.”

There are two tax increases in the Senate plan. But the 5.5 percent levy on hospital gross revenues, is part of a plan to both raise $207 million per year, and to redistribute those dollars right back to hospitals. This would enable Connecticut to qualify for $103 million in additional annual federal Medicaid payments. Rell had suggested a similar back-and-forth arrangement, but at a lesser 3.25 percent rate.

The Senate also voted to reverse a $70 million-per-year tax break for heirs to multi-million-dollar estates. That break, which took effect Jan. 1, raised the threshold for estate tax exemption from $2 million to $3.5 million. It also cut the tax by 25 percent on estates valued between $3.5 million and $10.1 million

Williams said he believes Rell’s primary tax objection lies with the estate levy. “That’s absolutely been an ongoing interest of hers, to protect multi-millionaires and give them a tax break.”

Rell did propose the estate tax reduction last summer as part of a compromise in which she also supported a higher top income tax rate. The state budget adopted last September increases the rate from 5 to 6.5 percent on earnings above $500,000 for individuals and $1 million for couples.