Democrats say Rell lacks focus on budget

One day after the legislature’s Black and Puerto Rican Caucus threatened to hold up her nominees for judgeships because of a lack of minority candidates, Gov. M. Jodi Rell came up with a compromise to get her choices approved by the Judiciary Committee.

Three weeks after Rell threatened to veto a proposal by Democrats to plug $1.3 billion of next year’s budget deficit, the governor has yet to offer an alternative plan of her own.

That, her critics say, shows that the lame duck governor’s focus these days is less on the state’s dire financial problems and more on taking care of her political allies.

Rell has been more concerned, they say, with securing judicial appointments for budget director Robert L. Genuario and Public Safety Commissioner John A. Danaher than with proposing an alternative to the $1.3 billion securitization scheme she pledged to veto – a problem that could triple the projected $726 million deficit for next year if unaddressed.

But the governor’s fellow Republicans in the legislature countered that majority Democrats, and not Rell, are timid when it comes to forcing the budget debate, preferring not to draw attention to deficits of historic proportion in an election year.

Sen. Edith G. Prague, D-Columbia, a veteran lawmaker who served with Rell in the House of Representatives in the late 1980s, said the governor’s political and budget focus have blended over the past few weeks.

“I like Jodi Rell as a person. She is basically a good human being,” Prague said. “But I really think the decisions she has to make are so difficult she’s finding it hard to make them, and easier to work on other things. But she doesn’t have that option. She’s the leader of this state.”

Appointing judges “is not a priority,” Rep. David McCluskey, D-West Hartford, said Tuesday.

mccluskey, david 4-28-10

Rep. David McCluskey: New judges are ‘not a priority’ (Keith M. Phaneuf)

McCluskey, a 12-year veteran of the legislature, also questioned why Rell is pushing early retirement incentive program for 2010, on the heels of a 2009 retirement incentive plan that prompted about 3,800 senior state employees to leave.

“It looks like it’s being done to accommodate the senior people who were hired under Rell and (former Gov. John G.) Rowland,” he said. “We should instead have a laser-like focus on the most severe budget crisis in state history.”

That crisis, as defined in a February report by the legislature’s nonpartisan Office of Fiscal Analysis, included not only the $726 million shortfall for 2010-11, but a $3.88 billion gap for 2011-12. The latter figure represents more than 20 percent of current $18.64 billion budget, and more than 60 percent of all revenues expected this year from the state income tax.

The 2010-11 budget depends on securitizing, or selling about $1.8 billion in future state revenues at a discount to any investors willing to pay $1.3 billion now.

McCluskey and other members of the Democrat-controlled Finance, Revenue and Bonding Committee, had recommended extending expiring surcharges on the monthly bills of United Illuminating and Connecticut Light and Power Co. customers for another decade. The committee specifically wanted to maintain 56 percent of the surcharge customers have paid since 2000 to reimburse utilities for costs tied to a state-ordered deregulation process.

But instead of reimbursing the utilities, which will finish recovering their costs soon, the surcharge will go to the state, providing $180 million annually, or $1.8 billion over the next decade, to be securitized down to the $1.3 billion needed for the next state budget.

Rell called this plan “the least desirable for Connecticut’s beleaguered families,” even though her budget office, in a February report co-authored by state Treasurer Denise L. Nappier, had outlined a similar securitization strategy.

Despite saying afterward she would offer an alternative securitization plan. Rell had not produced one as of late Tuesday. And Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, said even if one is provided later today, as promised by administration officials, legislative leaders have just seven days to analyze, potentially modify, and build support for a plan that represents 7 percent of all budget revenue in 2010-11.

“This has been very disappointing,” Williams said, adding the administration has missed multiple promised deadlines. “We had hoped to have a plan from her some time ago, For the governor to reject that (finance committee) proposal places upon her a responsibility to present us with an achievable securitization plan.

The Senate leader added that both the judicial appointments and the question of another retirement incentive program deserve attention, but not so much that it puts the next budget deficit at risk of tripling in an instant.

“I’m going to do everything in my power to keep that from happening,” Williams said, noting that looming just beyond the 2010-11 shortfall is a deficit more than five times its size just 14 months away. “Balancing FY10 and balancing the next budget are our two most important responsibilities.”

Jeffrey Beckham, spokesman for Rell’s budget agency, the Office of Policy and Management, said Tuesday that “we have done some extensive internal work on that (securitization) issue and expect to talk to the leaders in the next day or two.”

Sources said late Tuesday that fiscal analysts both for the governor and the legislature could upgrade annual revenue expectations by $100 million to $150 million based on modest growth in recent state income tax returns filed after the April 15 deadline. If those numbers are confirmed in a joint report due Friday, it could provide a total of $200 million to $300 million, covering both this fiscal year and next, that could used to reduce the $1.3 billion revenue target to be reached by securitization.

Both Beckham and the governor’s press office declined to respond Tuesday to Democratic legislators’ charges that the administration is focused more on assisting the governor’s political allies than on balancing the next budget.

But Republican leaders in the House and Senate said Democrats, who hold two-thirds’ majorities in both chambers, don’t need a plan endorsed by the governor to do their jobs.

“The governor and the treasurer met their obligation when they provided their report” in February, Senate Minority Leader John McKinney, R-Fairfield, said. “The Democrats have a super-majority. They want to blame the governor because they are unwilling to accept responsibility for their own budget.”

House Minority Leader Lawrence F. Cafero, R-Norwalk, said Democrats are fearful because the time has nearing when state government must implement this plan to sell future revenues at a discount, and the voters are watching. “They are getting all sorts of push-back from people all over the state,” he said. “They have a responsibility to act and instead they want to deflect attention onto the governor.”