Governor Rell: No Tax Increases,

No Added Borrowing to Reduce Deficit

            Governor M. Jodi Rell today said she is bitterly disappointed that majority Democrats in the Legislature have again failed to take any action to reduce the nearly half a billion dollar deficit in the current state budget.

            “There is no recognition of the very real problems the state is facing,” Governor Rell said. “Half-truths and half-measures are not the leadership we need. This lack of action only delays the inevitable day of reckoning.

            “The Legislature must act quickly to reduce this deficit – before the end of the calendar year,” the Governor said. “And when lawmakers do act, they must eliminate the deficit through real, lasting and achievable reductions in state spending. I will not sign any legislation that attempts to reduce the deficit by increasing taxes or additional borrowing.”

            “The new taxes and fee increases contained in the current budget are not generating the levels of revenue they were predicted to bring in, so why would even higher taxes be the answer now?” the Governor said. “And the payments on the debt we are incurring will add to the burden on future generations. If we borrow more, we jeopardize our credit rating, making it more expensive to pay for important projects in the future. In fact, the state Treasurer estimates a lowered bond rating could cost the state as much as $80 million a year.

            “The hard-pressed working people and employers of our state are still reeling from the worst economic conditions since the Great Depression,” Governor Rell said. “It simply makes no sense to believe that even higher taxes and fees are somehow going to make the situation better. Nor are even higher amounts of debt a responsible solution to our problems.”

            Governor Rell noted that an advocacy group, Connecticut Voices for Children, is calling for more than $1 billion in higher taxes as a “solution” to the state’s fiscal crisis – including $600 million in higher income taxes, $500 million in higher sales taxes, $220 million in higher business taxes and $75 million in higher estate taxes, according to an analysis of the proposal by the Office of Policy and Management.

            “These new and higher taxes would sound the death knell for economic activity in Connecticut,” the Governor said. “This is not a solution to our problems – it is a roadmap to ruin. We do not need to conduct a desperate search for ways to support the unaffordable status quo. We need to rethink how we spend taxpayer money.”

            Governor Rell had called the General Assembly into special session Tuesday after offering a deficit mitigation plan that included a wide range of spending cuts – some of which she can make on her own, while others required legislative approval – and additional “fund sweeps” from accounts such as the Citizens Election Fund, the Stem Cell Research Fund and the Tobacco and Health Trust Fund.

            Majority Democrats, however, adjourned the special session without taking any action.

            “I know that it is difficult for legislators to make spending cuts – it is difficult for me to propose them,” the Governor said. “Each cut has a constituency and each of those constituencies has been very clear in communicating their dismay. However, none of these constituencies has suggested a realistic alternative to making real, concrete reductions in state spending.

            “I am certainly open to ideas for other cuts,” Governor Rell said. “But simply bemoaning the necessity for cuts is not constructive. For months now the Legislature has done everything in its power to avoid making difficult decisions about cutting spending. Those decisions can no longer be avoided.

            “It is imperative that the Legislature act. They need to do their job. I have taken action, now it is time for them to act.”