Rell, Democrats battle over budget to the end

The dysfunctional relationship between Gov. M. Jodi Rell and the Democrat-controlled General Assembly regarding their joint custody of the state budget is ending the way it began two years ago – with mutual charges of irresponsibility.

The governor’s budget office used it’s the final monthly budget projection of the administration this week to blast new legislative recommendations to streamline state spending, calling the savings target “unrealistic” and charging that it regurgitates ideas her staff already has implemented.

And members of the Commission on Enhancing Agency Outcomes fired back that the outgoing Republican governor is trying to deflect attention from a huge deficit she is leaving behind for her successor, Gov.-elect Dan Malloy to resolve. Democratic lawmakers also predicted the report, which concludes – among other things – that the Rell administration failed to aggressively pursue available federal funds, would be a boon to Malloy.

“We continue to believe that achievement of $50 million in savings for (the Commission on) Enhancing Agency Outcomes is unrealistic,” Rell’s budget director, Brenda L. Sisco, wrote this week in her monthly budget report to Comptroller Nancy Wyman.

The panel, which insists its recommendations could save up to $229 million this fiscal year and more than $240 million by 2011-12, suggests several initiatives that “were already budgeted and are accounted for in our estimates.”

Most of the proposals in the report require legislative action, though some do not, and the legislature is not expected to meet in special session before the regular 2011 session begins on Jan. 5.

Given that the fiscal year, which ends June 30, would be more than half over before lawmakers even could begin debating any aspects of the report, Sisco added that “we believe that it is unlikely that any of the new proposals contained in the commission’s report can be implemented and yield $50 million in additional savings” before the year’s end.

That $50 million target is crucial because the legislature built that assumed savings into the $19.01 billion bottom line for the current budget.

Sisco’s office, which projected a mere $1.2 million surplus for the current budget, assumes that target would not be achieved.

Rep. James F. Spallone, D-Essex, co-chairman of the commission, called the administration’s statements “inaccurate and disappointing. I honestly didn’t feel like the administration was terribly cooperative with the commission while we did our work.”

The bipartisan group received near-unanimous approval for its final report. The lone dissenting vote was cast by Michael J. Cicchetti, Rell’s deputy budget director and her only representative on the group.

Cicchetti did correctly point out that the report includes some ideas already in the works, such as moving the state’s welfare program for single adults without children under the federal Medicaid umbrella and various reforms to purchasing rules.

But the commission also insists state government might be able to grab another $77 million in federal aid right now if it revisits federal welfare funding the administration left on the table – a claim that the state Department of Social Services disputes.

The panel specifically charged that while Connecticut received $56.3 million in federal stimulus earmarked for the welfare program that serves single women with children, it was eligible for $133 million. The key to securing all of that money would be to demonstrate sufficient state expenditures tied to increasing welfare caseloads.

“It also appears that Connecticut interpreted eligibility, expenses and reporting requirements too narrowly,” wrote legislative researchers assigned to the commission.

The relationship between Rell and the General Assembly’s Democratic majority, and between the governor and the efficiency panel in particular, has been strained since just before Connecticut entered the last recession in March 2008.

One month earlier, Rell unveiled a biennial budget proposal for the 2009-10 and 2010-11 fiscal years that closed a combined, projected shortfall of $6 billion. Nonpartisan legislative analysts said the gap was closer to $8.7 billion, prompting Democratic charges that Rell had offered an unbalanced plan to avoid having to propose the most painful spending cuts or tax hikes.

The relationship worsened five months later when the administration, forced by new legislation enacted despite Rell’s veto, revisited its fiscal forecasts and signed a new revenue schedule that recognized the larger deficit.

Meanwhile, the governor grew frustrated as Democrats largely ignored hundreds of millions of dollars worth of proposed spending cuts offered in deficit-mitigation plans submitted in late 2008 and throughout the first half of 2009.

“There has been no significant attempt by the Democrats to either fundamentally cut spending or fundamentally reorganize the size, scope or shape of state government,” Senate Minority Leader John McKinney, R-Fairfield, said Tuesday. “It is very fair of Governor Rell to be skeptical of the Democratic legislative leadership and their willingness to achieve the savings in this new report. … Until we make the changes, legislative and regulatory, it is simply just that – a report.”

But Sen. Gary D. LeBeau, D-East Hartford, a member of the Commission on Enhancing Agency Outcomes, said the report offers a blueprint toward saving big dollars. And regardless of how quickly the proposals are assessed by the new legislature, LeBeau predicted the ideas would be taken seriously by the Malloy administration.

“Clearly, when you look at this in the long-term, it is a tremendously important document,” he said. “There are some big numbers there and I think it will get a close look.” Malloy and the next legislature must balance a budget for the 2011-12 fiscal year that includes a built-in deficit of $3.67 billion, or about one-fifth of current spending, according to the legislature’s nonpartisan Office of Fiscal Analysis.

Colleen Flanagan, spokeswoman for the Malloy transition team, said the governor-elect and his budget director, Ben Barnes “are reviewing a number of recommendations, ideas and suggestions to achieve substantial savings,” but declined to identify specific ideas under analysis.

Besides pursuing federal funds more aggressively, the panel also recommended bulk purchasing and other cooperative agreements to reduce health care and social service costs, various agency consolidations, and new energy savings goals.

The report also called for a dramatic reduction in non-union managers and other professional posts while making no specific recommendations regarding unionized labor.