It was billed as a new plan to erase a $726 million deficit in next fiscal year’s budget without raising taxes.

In fact, the proposal offered Thursday by the legislature’s Republican minority piggy-backed on Gov. M. Jodi Rell’s Feb. 3 budget plan, which was designed to cancel $686 million in projected red ink.

The GOP lawmakers then added $274.5 million in their own spending priorities and subtracted $310.5 million in additional savings to come within a few million dollars of the deficit projected by the legislature’s non-partisan Office of Fiscal Analysis.

The spendng increases in the Republican proposal include restoring $200 million in contributions to state employee pension funds and adding another $74.5 million to provide new loans or tax breaks to spur business development and job growth.

On the savings side, the package includes new worker concessions, an early retirement incentive program, agency consolidations, privatization of state services, and other programmatic cuts.

Cafero, Lawrence, with GOP budget 4-16-10

House Minority Leader Lawrence Cafero describes the Republicans’ 2011 budget plan (Jacqueline Rabe)

“The legislature cannot repeat the mistakes of the past two years, when politics and procrastination led Democratic leaders to borrow nearly $1 billion to balance the FY09 deficit,” Senate Minority Leader John McKinney, R-Fairfield, said. “We need to address the FY11 budget crisis responsibly and expeditiously to protect families and businesses from further tax increases.”

However, two major uncertainties cloud the GOP plan:

  • The minority’s plan, like Rell’s Feb. 3 budget proposal, counts on $366 million in new federal stimulus money that has not been approved by Congress, and that OFA has so far refused to include in its projections.
  • It also relies on $150 million in concessions from state employee unions that already have rejected concession requests from Rell.

The labor concessions were not spelled out, and House Minority Leader Lawrence F. Cafero, R-Norwalk, said Republicans would not support extending the no-layoff protections granted most unionized employees through June 30, 2011 in exchange for the $700 million concession package ratified last May.

The Norwalk lawmaker said he hopes workers would be motivated to help by something other than job security. “How about the fiscal stability of the state you live in and you work for?” he said. “Sometimes you’ve just got to give and you don’t get back.”

SEBAC spokesman Matt O’Connor said the unions are interested in working with state officials to streamline government and achieve cost-saving efficiencies without cutting workers’ salaries and benefits. “This more politics than policy,” O’Connor said of the Republican legislators’ plan. “What they’ve proposed is just not realistic.”

Talks between Rell – also a Republican – and union leaders broke down last month, though. The coalition, which represents about 45,000 unionized state workers, said the governor showed “cynical disrespect” to these employees when she proposed a second concession package that would have allowed layoffs under certain conditions, required four more furlough days, deferred one cost-of-living raise and canceled longevity bonuses for senior workers.

“What kind of message do you send to 45,000 working families who sacrificed substantial wages and benefits to produce an agreement?” union leaders wrote to the governor in mid-March. “Apparently that is not an issue of real concern to you, although you’d think it would matter a lot to a governor who understood the value of a real partnership between managers and working people.”

The new Republican budget plan also would offer another retirement incentive program. Though full details were not available, this one would be open both to workers already eligible for retirement, and to those close in experience, but not quite at the threshold.

While Republicans didn’t propose any tax increases, much of their budget-balancing effort relies on increased federal aid next year, nearly $520 million. But that includes $366 million increase in stimulus funding based on unapproved legislation pending before Congress. Rell built that increase into her budget as well, but the legislature’s nonpartisan Office of Fiscal Analysis hasn’t recognized that potential revenue in any forecasts yet. A new OFA report is due in early May.

The office’s policy is not to comment on their projections, but Cafero said he expects it would come to the same conclusion about this potential revenue that Rell and Republican lawmakers have.

Sources have said majority Democrats are planning to use that potential revenue as well to support any 2010-11 budget bill they attempt to pass.

House Speaker Christopher G. Donovan, D-Meriden, said he would await an OFA analysis of the Republican proposal.

Senate Majority Leader Martin M. Looney, D-New Haven, called Republican proposals to consolidate agencies and spur job development were “sound ideas,” but said the GOP should have embraced the Democrats’ proposal to reverse a $70 million-per-year cut in the tax on wealthy estates that took effect Jan. 1.

“We are disappointed that Republicans continue to support a tax break for multi-millionaires,” Looney said. “Under their plan the rich get a tax cut and everyone else pays for it. That’s not what families call common-sense.”

Looney added that “We remain confident there is room for compromise and that a solution can be reached in the coming weeks.”

Democrats and Republicans did agree earlier this week on a bill to eliminate nearly 90 percent of this fiscal year’s $371 million projected deficit through a combination of spending cuts, raids on special accounts and trust funds and program changes that leverage additional federal aid.

Rell, who signed the bill on Wednesday, sent legislators a letter Thursday asking for a meeting next week during which she would present her second budget plan for 2010-11. It was unclear how that might differ from the $18.91 billion budget she submitted on Feb. 3.

The governor’s office did not comment on the Republican legislators’ budget.

Besides counting on more help from Washington, much of the deficit-mitigation work in the GOP plan involved embracing more than $260 million in cuts Rell also proposed first 2 ½ months ago.

Some new cuts were put on the table as well, though.

Republicans proposed a 10 percent pay cut for all legislators, the governor and the other constitutional officers, and all department commissioners. This move, coupled with the elimination of all legislative mailing privileges, would save nearly $4 million.

“If you’re asking everyone to pitch in for this problem, it’s only fair to lead by example,” Cafero said.

About $19 million would come from consolidations to merge 40 departments, agencies and offices into 12, and to delay establishment of the State Contracting Standards Board, which was supposed to begin operations this year.

One of the proposed mergers would combine six legislative commissions assigned to represent issues unique to women, children and racial and ethnic minorities into the new Commission on the Status of Protected Citizens.

A second would unite three major departments – Social Services, Children and Families, and Mental Health and Addiction Services – and three smaller boards and agencies, into a new Department of Human Services.

“We must make government smaller and do away with programs we no longer can afford,” Cafero said.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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