House drops energy auction from budget

The Connecticut General Assembly staggered into the final weekend of the 2013 session Saturday, trying to close an elusive budget deal among majority Democrats, who forced the Malloy administration to give up on a plan to raise $80 million through an energy auction.

Sources in the House and Senate Democratic caucuses said the tentative budget deal would redirect proceeds from a cap-and-trade, anti-pollution program to make up some of the lost revenue. And for the second time in recent days, lawmakers scaled back a controversial tax extension on electricity generators. 

Malloy administration officials and legislators conducted impromptu negotiations Friday in Capitol corridors turned sticky from the first hot breaths of summer, often with lobbyists and reporters straining to hear.

Arms folded, House Minority Leader Lawrence F. Cafero Jr., R-Norwalk, stood outside the House, warning Mark Ojakian, the governor’s chief of staff, that the GOP was unhappy with proposed election legislation. He threatened a filibuster.

“It has the potential to be one of the ugliest moments in this legislature, certainly in this session, if they run the bill,” Cafero said he told Ojakian.

Cup of coffee in hand, House Speaker J. Brendan Sharkey, D-Hamden, trudged up one flight of stairs to the third-floor corner office of Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn. Their topic was the budget — and the refusal by half the House Democratic caucus to accept an $80 million one-shot revenue item.

After a caucus ended early Saturday, House Democratic leaders conceded that the idea was dead.

Fifty-two of the 98 House Democrats signed up as co-sponsors of an amendment stopping the governor’s plan to raise $80 million by auctioning the rights to serve certain electric customers, an idea opposed by AARP and the Connecticut Citizen Action Group.

“It looks like consumer voices can make a difference,” said Tom Swan, the executive director of CCAG.

Ojakian challenged opponents to find $80 million in cuts.

Benjamin Barnes, the governor’s budget chief, declined to comment on the energy auction.

Majority Democrats in both chambers discussed the budget behind closed doors late Friday or early Saturday.

During those talks legislative leaders outlined several steps to replace the $80 million in revenue the energy auction was supposed to provide.

One solution, sources said, would be to dedicate at least a portion of the proceeds Connecticut receives through the Regional Greenhouse Gas Initiative to the next two-year budget.

Connecticut is one of nine states working with eastern Canadian provinces to reduce greenhouse gas emissions.

The initiative sets a cap on how many tons of carbon pollutants that may be emitted, and then auctions off permits – each representing the right to emit a portion of that total capped amount. Industries bid for those permits, and the proceeds typically are used to support conservation and renewable energy programs.

According to the initiative’s Web site, Connecticut’s total proceeds since it joined in September 2008 have been $71.6 million, an annual average of about $14 million over five years.

Sources said the permit cost is projected to rise significantly over the next few years, though it was unclear how much revenue from this effort would be dedicated to the next state budget.

Another step to replace energy auction revenues involves a $63 million settlement the state reached last week in connection with a lawsuit against five major tobacco manufacturers in the late 1990s.

Legislators and the Malloy administration previously had agreed to use $40 million from that settlement to help fund the next budget, and sources said early Saturday that another $22 million from that agreement also would be dedicated to balance that spending plan.

In addition, sources said, a controversial tax on power plants was revisited for the second time in eight days, and reduced once again. This time the tax, which would be extended for at least a portion of the next fiscal year, would raise somewhere between $15 million and $18 milion, sources said.

Malloy originally proposed extending the generation tax for two more fiscal years at the current rate of $2.50 per megawatt hour. This would have pumped $76 million per year into the state’s coffers through 2014-15.

Legislators pressed to scale this back, and a tentative deal eight days ago settled on just a one-year extension worth about $30 million.

As Friday night melted into Saturday morning, the House Democratic majority remained in caucus off the House floor, struggling to set a game plan for the weekend. 

It was a day of small dramas, played out against a ticking clock that is winding down to the constitutional adjournment deadline of midnight Wednesday, when dozens of bills will die from inaction.

“It’s going to be a session of disappointment to a lot of people,” said Rep. Arthur O’Neill, R-Southbury.

Frustration and fatigue bubbled over in the House over an unlikely issue: a largely symbolic vote sought by Rep. Tony Guerrera, D-Rocky Hill, against a Correction Department plan to locate sick and elderly inmates in a Rocky Hill nursing home.

His amendment, which was written to stop the placement of the inmates in his district, had no chance of being taken up in the Senate, but it was important to Guerrera, who has feuded over the issue with the Malloy administration.

Rep. Toni Walker, D-New Haven, stood and objected, then made a parliamentary move to refer the matter to the Appropriations Committee for a review of its budgetary impact, denying Guerrera of his vote.

Business stopped in the House for an hour. Sharkey was summoned from the budget talks to make peace between two of his senior deputies: Walker is co-chairwoman of the Appropriations Committee; Guerrera is co-chairman of Transportation.

Walker had no sympathy for suburban objections to the presence of elderly inmates.

“We have two sober houses, one halfway house and one homeless shelter in my neighborhood,” said Walker, who represents one of Connecticut’s poorest cities. “These are things we all have to accept for the good of the state of Connecticut.”

Walker added that while her referral to Appropriations certainly spoke to an issue of fairness, it also was grounded in proper procedure.

The current state budget relies on saving about $5 million by transferring certain terminally or severely ill inmates to nursing home care, where treatment is more cost-effective than that delivered in prison.

“We are struggling right now to find every penny we can,” said Walker, who has been embroiled in difficult negotiations with the Malloy administration trying to balance the next state biennial budget.

Sharkey negotiated a truce. Walker withdrew her motion, and debate on the bill was postponed. The plan is to bring it up Saturday, allow Guerrera a vote on his amendment – and then shelve the amended bill without further action.

“Let’s get back to work,” Sharkey said.

Walker and Guerrera later hugged outside the House.

One significant bill won final passage Friday, if quietly.

The Senate voted unanimously to pass the “Trust Act,” a bill that bars police from detaining someone solely for immigration issues. It previously won unanimous passage in the House.

The bill generated little discussion in either house, but advocates called it groundbreaking legislation.

“This is a monumental victory for the immigrant rights movement,” said Ana Maria Rivera of Junta for Progressive Action. “The fact that advocates, our governor and the entire Connecticut legislature worked together to send the message to ICE that we will not allow our communities to be separated is historic.”

The Senate also gave final legislative passage to a bill expanding the state’s foreclosure mediation program.

The Senate also found time to address nuisance dirt bikes. It voted to authorize municipalities to increase the penalties for riding dirt bikes and all-terrain vehicles, an issue in New Haven, the home of Senate Majority Leader Martin Looney.