Rell Warns Of Cuts As Budget Deficit Grows (Courant)
http://www.courant.com/news/politics/hc-rell0203.artfeb03,0,5091213.story
By CHRISTOPHER KEATING | The Hartford Courant
February 3, 2009
Gov. M. Jodi Rell said Monday night that the state will endure “painful” spending cuts that she could not avoid because tax revenues have tumbled more than officials had feared.
Rell did not provide details in advance of her budget address Wednesday, but she reiterated her stance that she will not propose raising taxes during a recession.
She made the statement in a live, televised address — unprecedented for her — that capped a day in which projections about the size of the deficit worsened significantly.
The legislature’s nonpartisan fiscal office put the projected deficit for the current fiscal year at $1.35 billion — or 7.9 percent of the budget. That is about $400 million more than a projection by Rell’s budget office only two weeks ago.
“To be sure, there will be times of trial and tears in the weeks and months ahead,” Rell said in her address, which was carried by local networks at the top of the evening news. “I have worked long and hard on my plan and, yes, it calls for sacrifice. It makes cuts that will be painful.”
The fiscal office is also projecting deficits of $3.97 billion in the fiscal year that begins July 1, and $4.71 billion the following year, which would be 24.2 percent of the state budget.
“The news has gone from bad to worse,” said Sen. Andrew Roraback, ranking Senate Republican on the tax-writing finance committee.
Rell’s no-tax-increase stance differs sharply from that of state-employee unions seeking to preserve services and the jobs of the unionized workers who provide them.
The union coalition is spending about $105,000 in a five-day blitz of television and radio advertisements that call upon the legislature to avoid cutting state troopers, teachers, nurses and others. The 30-second TV commercial will be shown 82 times on four stations through Thursday, and the 60-second radio ad will be heard 157 times on three stations in the New Haven and Hartford markets. “The message is, cutting public services in a recession is only going to make things worse,” said Larry Dorman, a union spokesman. “We want to get the message out.”
Senate President Pro Tem Donald Williams said raising taxes and cutting services are both bad options.
“Neither solution is beneficial to the Connecticut economy,” said Williams, a Democrat. “Either side of the equation is harmful.”
Comptroller Nancy Wyman predicted Monday that the deficit would be $1.1 billion for the current fiscal year, and the Office of Fiscal Analysis said it would be even worse. Overall, collections of the state income tax are $1 billion lower than originally projected. The sales tax is down by $368 million, and real estate conveyance taxes are down by $109 million as both the volume of home sales and their prices have dropped.
Since we’re in the second half of the fiscal year, and because billions of dollars have already been spent, closing the budget gap through cuts becomes increasingly more difficult.
“Failure to act quickly will inevitably lead to the near-emptying of the state’s $1.4 billion rainy day fund,” Wyman said.
Christopher Keating is The Courant’s Capitol bureau chief.
Join us on Facebook. Fight the Lies.