With Week Remaining in Fiscal Year, Governor Rell

Again Calls on Democrats to Pass Responsible Budget

            With exactly one week remaining in the current state fiscal year, Governor M. Jodi Rell today again called on majority Democrats who control the General Assembly to pass an affordable, responsible state budget for the next two years – a budget that takes into account the continuing deterioration of Connecticut’s economy and the weakness of state tax revenues.

            Should the Legislature fail to meet its responsibility, Governor Rell said, she will have ready an Executive Order that will allow the state to continue operating efficiently.

            The Governor and Democrats who control the Legislature have been at odds over the state budget for the next two fiscal years, which faces a deficit of about $8 billion. Governor Rell has insisted that the deficit be reduced through cuts to the size and cost of state government. Democrats have proposed a budget that reportedly includes $2.8 billion in increased taxes – the largest tax increase in Connecticut history – but have so far released no details of their tax plan.

            “If the Democrats are intent upon passing such a tax increase, they owe it to the individuals and employers who will be paying those taxes to provide them with the details,” Governor Rell said. “There is only a week to go – and still there is no information about who will pay these taxes, or how much they will be forced to pay. The Democrats should spell out their plan and hold a public hearing on it before bringing legislators back to the Capitol for a vote.”

            On Monday, the Governor’s budget office – the Office of Policy and Management, or OPM – sent its monthly report to the Office of the Comptroller showing that revenues from virtually every tax collected by the state have fallen below previously lowered projections.

            “The OPM report is awash in red ink,” Governor Rell said. “There is no mistaking the fact that we are not collecting the tax revenues we expect now – and those expectations have already been reduced several times. In just the month of May, the income tax fell below projections by $26 million.

            “The Legislature should craft – and pass – a new state budget that is both responsible and affordable,” the Governor said. “The families and employers of Connecticut are already suffering the effects of the worst economic downturn since the Great Depression. New taxes are not going to bring in significant new revenues if there is no economic activity to support them – let alone encourage job growth or the new economic activity we need to recover.

            “The only sensible solution is to reduce the bloat of bureaucracy and sharply reduce state spending,” Governor Rell said. “Not only will this enable us to weather the current economic storm, it will position our state for future growth and enable us to deal effectively with future budgets – when one-time sources of revenue such as the federal stimulus and the ‘Rainy Day Fund’ will not be available to help us.”

            If the Legislature fails to pass a responsible budget, Governor Rell is preparing an Executive Order that will fund state agencies and operations until a new budget is in place. Some agencies will receive monthly allotments of one-twelfth of their prospective budget; others will receive less, depending on their expected needs.

            Expenses that are not immediately necessary – the purchase of snow tires or sand for icy roads, for example – will not be funded until they are needed.