Democratic state lawmakers’ new deficit-mitigation plan would eliminate 21 deputy commissioners in Gov. M. Jodi Rell’s administration, saving $3.1 million annually, according to documents and other sources.
The plan also would cancel seniority bonuses and require another furlough day for non-union workers, cut back health care, social service and education programs and make other reductions worth nearly $180 million across this fiscal year and next.
That $180 million total also includes a new $6 million cut to the public financing program for state elections, and $3.5 million from the popular biomedical trust fund. It does not include Rell’s earlier proposals to cut town aid and money for stem cell research.
The plan, which is expected to be adopted tonight in the state Senate and Saturday in the House of Representatives, also relies $76 million in new revenue by reversing a January 1 reduction in the tax on wealthy estates. And a second tax increase, a 5.5 percent rate on hospital gross revenues, is the linchpin of a plan to bring more than $165 million in additional federal aid into Connecticut.
It was not clear immediately whether the plan would be acceptable to Rell, who largely has opposed tax hikes. “I would hope we would see the governor take our lead” and sign the measure, Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, said. The governor’s office declined to comment initially, saying only that the plan was under review.
Senate Democrats had announced Thursday they would move forward with their own plan to close the deficit, having failed to reach a deal with their House counterparts, who reportedly were unwilling to consider further reductions to social service, health care and job development programs. Similarly, Senate Democrats have been wary of further tax and fee hikes given that increases worth $952 million this year and $674 million in 2010-11 were built into the budget adopted last September. Rell criticized the package, particularly the tax hikes, but allowed it to become law without her signature.
But sources said top Democrats from both chambers renewed negotiations early today and reached a compromise by mid-afternoon.
“It has been a struggle to address the recession that’s hurting Connecticut.” Williams said late this afternoon as he and House Speaker Christopher G. Donovan, D-Meriden, announced the compromise.
“I’m certainly optimistic we can get this budget done, because we do work together,” Donovan said.
The speaker refused to discuss specifics in plan when asked whether his caucus members would accept increased co-payments for poor families on state-subsidized health insurance, cuts to school health clinics, teen pregnancy prevention programs, early childhood learning services and other top programs they have vehemently defended so far. “They all said ‘yes’” during a closed-door briefing earlier today, Donovan added.
Democrats were helped in their deficit-mitigation efforts this week by the governor who took advantage – as expected – of a clause in the state employee union concession deal ratified last May that allows state government to reduce its 2009-10 contribution to the worker’s pension fund by $100 million.
After that reduction, the remaining deficit for the current fiscal year, based on Comptroller Nancy Wyman’s March 1 forecast, stands at about $420 million, which matches the value of the cuts, tax increases and additional federal aid in the Democrats’ new plan.