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Gov. Rell's Truly Bold Budget State Shake-Up • The governor is not letting this crisis go to waste Hartford Courant, Feburary 5, 2009 'Never allow a crisis to go to waste," White House chief of staff Rahm Emanuel is fond of saying. The like-minded Gov. M. Jodi Rell is using the state's financial crisis to shake up the status quo in Connecticut government.
On Wednesday, Mrs. Rell unveiled a two-year budget that dissolves many agencies and commissions and consolidates others, while adding innovative programs that will encourage the regional sharing of services and equipment. Though some proposals wander off-course, Mrs. Rell is headed in the right direction.
The state's rapidly declining revenues leave her no choice but to overhaul and cut. And many of the proposed reorganizations are long overdue, though some, such as the elimination of the Office of the Consumer Counsel, make less sense. That watchdog of utilities has saved ratepayers millions of dollars; its costs are paid not by state taxpayers but by ratepayers.
But the governor's budget does less damage than feared to cities and towns and public education. It avoids raising taxes but instead raises fees and relies on $275 million in concessions from state unions — no small assumption — and $2 billion in hoped-for federal stimulus aid.
Though many taxpayers will be grateful, the governor may come to rue her no-tax pledge if the economic storm worsens. Revenues from a boost in the gas tax, for example — supported by the MetroHartford Alliance business group — would help pay for much-needed rail service.
The budget also contains intriguing ideas, such as a Connecticut Conservation Corps to clean state parks and beaches. Mrs. Rell's surprise proposal for a "Middle College System" that would merge vocational-technical high schools with community colleges deserves debate. Some may see it as dumbing down the colleges and turning them into job-training centers.
However, The Courant enthusiastically supports Mrs. Rell's provision of $50 million in grants to municipalities that share services such as recycling and equipment such as snow plows, and her proposal to expand the bottle bill to include water and other noncarbonated drinks.
Inevitably, there are casualties in this budget, including the commissions that advocate for women and minorities, and some agencies that have not made the executive branch's job easy. The watchdog child advocate would now operate inside the attorney general's office rather than independently, for example. That could continue the valuable service while saving on overhead.
But many agency consolidations make sense, such as combining the Connecticut Development Authority and Connecticut Innovations.
We also applaud the governor's suggestion to whittle down the unwieldy and expensive probate court system, though we understand closures and consolidations will be painful to the staffs whose jobs will be eliminated and to the clients served.
Connecticut is swimming in red ink. The governor is right to call a halt to hundreds of millions of dollars in authorized bonding projects. The decade-long University of Connecticut building program, and the newer Connecticut State University one, also can use one-year breathers while the state tries to get its financial house in order.
The biggest winners Wednesday appear to be towns and cities, whose leaders should be smiling this morning. They have to love Mrs. Rell's proposals to suspend costly state mandates such as in-school suspensions and to reform binding arbitration — and to leave education aid intact. But they didn't entirely escape. Payments in lieu of taxes for hospitals and colleges were among other funds cut.
In past addresses, the governor has challenged the legislature to be bold. She's also often likened the state's problems to a family's. Her maternal concern for the taxpayer has accounted in part for her great popularity.
The budget Mrs. Rell unveiled Wednesday truly is bold. She sees in this crisis the chance to remake state government in ways this page has advocated for years. She will need every ounce of her considerable political capital to see this through. What's your opinion? Be heard with a Letter to the Editor: www.courant.com/writeletter Rell's budget offers chance for change
New London Day
February 5, 2009
Some Connecticut taxpayers might want to jump for joy.
That's because the two-year, $38.4 billion state spending plan proposed by Republican Gov. M. Jodi Rell does something very unusual - it recommends spending less in 2010 than what is budgeted for in 2009.
What a terrific idea during tough economic times. Under Gov. Rell's suggested budget, government in the state would become smaller, less expensive and more efficient.
She has proposed sweeping reforms that would eliminate or consolidate 23 state agencies and commissions, resulting in the elimination of 400 positions. In addition, she recommends abolishing an additional 448 state jobs that are currently not filled. The governor isn't just saying don't fill them now, she's saying, get rid of them entirely. And she is looking for concessions from state workers.
Some of what Gov. Rell is proposing will be a hard sell. And some of it may be unpalatable and unacceptable. But it is the kind of forceful attack of a difficult problem that is required.
The state's revenues are in a free-fall. Virtually every other business and industry is reeling and taking steps to cut spending. The state is not immune. Gov. Rell has proposed reforming government and rethinking priorities. Her budget message: this is the state's opportunity to change things for the better. The General Assembly must take up the challenge.
There will be resistance. Among those agencies on the elimination list: the offices of consumer counsel and health care advocate, both watchdog agencies. And, there is a recommendation to consolidate the state's existing 117 probate courts to 36 and evenly distribute the workload. Probate judges would continue to be elected but would have to be attorneys with at least 10 years of service.
Under Gov. Rell's two-year plan, state aid to municipalities would not be cut, but additional incentives would be available to cities and towns that regionalize services. Hallelujah.
Noncarbonated water would be part of an expanded bottle bill and municipalities would be eligible for up to 3.5 cents for every container recovered through roadside collection. The governor suggested relief from unfunded mandates for municipalities and advocated for a two-year delay of a change of jurisdiction for juvenile prisoners that when implemented will be costly for the state and municipalities.
She is proposing a Civilian Conservation Corps to put the state's unemployed to work, closing the courthouses in Bristol and Meriden, and increasing the cost of every single license, permit and fee issued by the state, from a fishing license to a driver's license. The governor's budget plan is chock full of ideas to cut the cost of government and raise revenues, such as shaving to 4 percent (from 5 percent) the commission paid to store owners who sell lottery tickets, cutting funding for AIDS services by $3.1 million, and creating a “middle college system” that would consolidate technical high schools and community colleges for job training.
There will be critics and cheerleaders. Advocates will lobby to keep funding intact, agencies operating and state workers employed. And the taxpayers who have already been hit, those who have lost their jobs and savings, will push to reduce the cost and scope of state government. Gov. Rell has certainly provided fodder for both sides.
Rell to Assembly: A blueprint for leaner government Connecticut Post editorial February 5, 2009 Republican Gov. M. Jodi Rell on Wednesday handed the Democratic-dominated General Assembly a blueprint for providing a leaner, more streamlined state government to meet these fiscally distressed times. Her proposal would reverse the trend of the past decade in Connecticut of a growing state bureaucracy supported by major increases in state spending. Rell took the wraps off a proposed $38.4 billion recommended budget for the next two years that keeps spending flat in the first year and increases it by 3.5 percent in the second. Her budget is premised, in part, on modestly reducing the size of state government by consolidating or eliminating 23 state agencies and reducing the 50,000-plus state employee ranks by 848 positions, gaining $295 million in employee contract concessions, using some $361 million of the expected $2 billion in federal stimulus funding, draining the state's $1.4 billion Rainy Day Fund and overhauling the probate court system. Rell would, however, sharply boost the cost of almost all state fees and licenses. But, she does not propose any major tax increases, certainly a welcome move to beleaguered taxpayers who are being hard-pressed by the current national recession and whose job losses and reduced salaries and bonuses have led to dramatic drops in state tax revenues. What the governor has effectively done in her recommendations is to throw down a challenge to majority Democrats to work with her during this session in crafting a final budget that concentrates on government's core missions of educating children, protecting citizens and helping those in need. Democratic leaders, who control both chambers of the Legislature with super majorities, reacted cautiously to the governor's proposals, no doubt finally beginning to realize the challenges that lie ahead in trying, first, to balance the current budget that has a $1.35 billion shortfall and, second, then trying to achieve a biennial budget that begins July 1. If Rell and the Democrats do not work in unison, or at least with more cooperation than in the past, it could be a long, hot summer at the Capitol that will extend beyond the mandated June 3 adjournment. With Connecticut confronting a severe fiscal crisis, it was expected that the governor's recommendations would be painful. However, this painful time also presents an opportune moment to change the face of state government. Rell's budget blueprint points Connecticut in the right direction. Town and Cities Despite the severity and grimness of her plans, the governor provided a few surprises, the most encouraging being her proposals to retain current funding levels for Education Cost Sharing and school transportation grants and major general government grants for municipalities. In addition, Rell included modest new spending initiatives to provide incentives for communities to cooperate regionally. These are moves, if adopted, will greatly help communities, especially those such as Bridgeport that are heavily reliant on state aid, to balance their budgets without resorting to exorbitant tax hikes. In a move the would also aid municipalities, Rell proposed major changes to the state's binding arbitration laws, calling for a two-year suspension of binding arbitration for public employee union contracts, which would effectively freeze those contracts in place, and calling for requiring a two-thirds vote in the Assembly to enact any new unfunded mandate on municipalities. These actions would exert a tremendous savings impact on local governments and their citizens and we urge Democrats, who in the past have rejected such proposals outright, to give them a fair hearing in this new economic climate. What's Ahead? These are tough budget recommendations requiring difficult but necessary decisions. The decision-making will become even tougher if the current fiscal year's shortfall continues to grow and if a new estimate of the shortfall for 2009-2011 released Wednesday by the Assembly's non-partisan Office of Fiscal Analysis is on the mark. OFA now estimates the two-year budget shortfall at $8.7 billion, while Rell's budget is based on her office's $6 billion shortfall estimate. As the governor has recommended, Connecticut lawmakers, too, will be forced by this recession to finally prioritize state spending and change the structure of state government. They must accomplish this task in the coming months without resorting to onerous tax increases that citizens at this time simply cannot afford. Rell's budget: Doing what's right for municipalities Danbury News Times editorial February 5, 2009 Western Connecticut mayors, first selectmen and school superintendents had been expecting bad news from Gov. M. Jodi Rell about the state budget. They expected funding for schools to be drastically cut. They expected other aid to municipalities to be drastically cut. Instead, the governor's $38.4 billion two-year budget released Wednesday avoids that scenario. She proposes to keep state aid for schools and municipalities at current levels, despite a state deficit that is estimated to be as high as $8.6 billion over the next two years.
That decision certainly spares the governor a firestorm of criticism from municipal officials. But it's also the right thing to do.
As she said in her budget address to the legislature, "we cannot, in good conscience, balance the state budget on the backs of property tax payers. They cannot afford higher local taxes any more than they can afford higher state taxes."
Throughout this region, school districts had been looking at a reduction in services and a reduction in staff. Some of that may still happen, as local budgets are put together. But without Rell's commitment to current funding, this would have been an even more difficult budget year.
"We were scared to death,'' said Bethel Schools Superintendent Gary Chesley. "I'm happy to have what we have."
Rell has proposed no increase in taxes, but is seeking an additional $172 million in revenue by raising state licenses and fees. She is proposing the elimination or merger of 23 agencies and commissions and the elimination of 400 jobs. She is seeking $275 million in savings from state employee unions through a wage freeze and changes in pension and insurance benefits. She wants to means-test the state's subsidized prescription drug program for the elderly.
Is Rell's budget balanced? Maybe not. It is based on her own budget office's estimate of a $6 billion deficit over the next two years. The legislature's nonpartisan Office of Fiscal Analysis says the deficit is more like $8.6 billion over two years.
If Rell's budget is balanced, it is because she is spending the state's $1.3 billion Rainy Day Fund over three years, and is basing her budget on the receipt of $1.4 billion in federal stimulus funds, which have not been approved by Congress.
Nevertheless, the governor's budget is a smart political document. With the state facing big deficits, the budget puts the pressure where it should be -- on state government. Municipalities have been creative and practical in these difficult times; it's time for state government to adopt a similar approach.
Rell draws line with austere budget New Haven Register editorial February 5, 2009 Gov. M. Jodi Rell’s proposed state budget is the type of extremely tough fiscal medicine Connecticut must swallow to survive a devastating economic slump. It reflects the unavoidable reality that the state’s tax revenue cannot support expanded spending.
Based on Jan. 15 estimated tax returns, projected revenue for the year from the income tax has dropped $665 million, the corporation tax revenue has dropped $100 million and the sales tax is down $50 million. Those revenue numbers explain why the state will face a projected deficit of $8.6 billion over the next two years if state spending continues at the current pace.
It is why the governor is proposing spending a fraction of a percent less in the coming budget year than this year.
Even at $38.4 billion, the two-year budget proposal is one that nobody will like. It cuts 400 jobs and eliminates another 450 that are vacant. Rell wants $295 million in concessions from state unions. There is no new money for municipalities, nursing homes or nonprofit social services providers. The state would no longer pay Medicaid costs for legal immigrants. Money to higher education would be cut by another 2 percent. There would be a Medicaid co-pay and an asset test for ConnPace, the state’s prescription drug program. Some 70 boards and commissions would be eliminated as well as 10 state agencies. Even with what would be considered draconian cuts in normal times, the governor still has had to stretch to cobble together the legally required balanced budget. She does it by spending all of the $1.38 billion in the Rainy Day Fund, putting off bonding for construction at the state’s public universities, borrowing heavily in the budget’s second year and raising fees.
The governor’s budget is as much a statement of her political philosophy as a spending document. She wants a smaller, more efficient government that taxpayers can afford. While everyone will sign on to the concept of an affordable government, it is certain the Democrats who control the General Assembly will disagree with her on how much government Connecticut taxpayers can afford.
While the governor, a Republican, has proposed no tax increases, they are an inevitable and necessary part of the budget that is ultimately approved. Raising taxes is no more objectionable than going into debt, as the governor proposes, to pay operating costs.
Taxes on cigarettes and alcohol are appropriate targets for increases. The most likely increase is the Democrats’ millionaire’s tax, which would hit incomes as low as $150,000 a year.
The bank executives and hedge fund managers of Fairfield County have lost public sympathy and, in truth, can afford to pay more. But, the Democrats will err if they make an income tax increase too onerous and set back the economy even more.
Rell’s budget message has set the right tone for the start of what is likely to be a lengthy budget debate.
Gov. Rell talks the right talk Waterbury Republican-American editorial February 5, 2009
Gov. M. Jodi Rell offered a great deal to support in her budget address Wednesday: eliminating agencies; rolling back mandates; closing courthouses; taking laws off the books; axing 850 jobs; merging probate courts; folding the state vocational high schools into the community college system; and more.
Her tough talk was almost jarring, and her promise to end business- as-usual fiscal practices was part Lincoln, part Reagan. She deserves credit, too, for setting a low floor for the coming budget negotiations with lawmakers.
But it remains to be seen how much of what she proposed will come to fruition — your Democratic legislative supermajority missed most of her applause lines — and how much she can do without offending union contracts, judicial decrees, and the sensibilities of the vested interests married to all the jobs and offices and agencies she wants to jettison.
Remember, too, it’s gubernatorial custom to offer pie in the budget sky to have something to sacrifice later.
But how long can she stick to her read-my-lips promise of no tax increases? Flat-funding municipal and school aid won’t be easy, either. And at first blush, it’s difficult to see her budget balancing.
For one thing, the Office of Fiscal Analysis says the two-year deficit projection is up to $8.7 billion, or about $2.7 billion more than the governor’s budget baseline. She’s also relying on $275 million in union concessions and other questionable revenues. Give her credit for seeking to cancel $400 million in bonds for earmark projects, but her timing — weeks after charging $1.1 billion in pork to the state credit card — was odd in the extreme.
Boosting regional cooperation among municipalities and consolidating probate courts are worth pursuing, but thoughtful preparation and execution will be problematic in the time allotted. Her Office of Accountability has merit, but to do the job right, the office must be an independent agency (a private contractor?) that also periodically determines if agencies are fulfilling their mission.
Much of the fiscal pain the state and its municipalities face today may be traced to binding arbitration. Rather than a two-year suspension of the system, she should have demanded its abolition in favor of traditional collective bargaining to send the strongest possible signal that she really cares about the plight of taxpayers and cities and towns.
To spur the economy, she should have proposed permanent income- and business-tax reductions, a tax credit for people who pay for their own health insurance, and tax exemptions for investment income. As history has shown, lower taxes increase government revenues. Proposals for privatizing services also would have been welcome.
Her budget address was far and away the best in her tenure. But now comes the hard part: walking the walk.
Rell gets real February 5, 2009 Manchester Journal Inquirer editorial In government, a little change counts for a lot, because government is a leviathan — a large, slow beast not easily moved.
Hence, Barack Obama cannot “change” everything about Washington, D.C. But if he changes a few things — if he extends health insurance to most Americans, revives antitrust enforcement, and restores American diplomacy — he changes a lot. Gov. Jodi Rell has been governor of Connecticut since July 2004. In that time she has not changed very much. She has not, save for one big exception — the establishment of public financing of political campaigning — tried to change much. She has been more of a caretaker and, in the best sense, a den mother for the state. Rell is a person of compassion who generally seeks bipartisan “good government.” She established a higher ethical standard than Connecticut had come to accept at the Capitol. And that was about it. It was enough. People like her.
But, in an eloquent and somber budget address Wednesday, we saw another Jodi Rell. We heard and saw a fiscal hawk, which might be defined as someone who will be real about public finance. And we saw a reformer, which might be defined as a person willing to look at doing things in a new way. Rell wants to change the way state government works, and the way she governs.
That in itself is big change.
This was less a den mother than a master sergeant; less the mother of the Partridge Family or the Brady Bunch and more like Margaret Thatcher.
The foundation of Rell’s reform platform is: no new taxes in time of recession, on the supposition that new taxes would break many taxpayers and drive others out of the state.
Next, she wants to streamline — consolidate many state programs and eliminate both agencies and positions.
Finally, Rell actually proposes new initiatives. She wants a temporary freeze on, and a reduction of the scope of, binding arbitration. And she proposes to establish a new state jobs program — a Connecticut Conservation Corps, based on Franklin Roosevelt’s old Civilian Conservation Corps.
Rell’s $38.4 billion, two-year budget would abolish or consolidate 23 agencies and eliminate 400 jobs. It would be the largest consolidation of government services in two decades.
Her plan would close courts, hospitals, and other state facilities.
Municipalities would be asked to pay more for public school construction.
And more than $300 million in annual borrowing for capital projects at public colleges and universities would be suspended for one year.
Overall, Rell’s plan cuts $2.2 billion from the funding needed to maintain current services. Nonetheless it would still boost spending 2 percent in the next fiscal year to $18.85 billion, and another 3.6 percent to $19.53 billion in 2011.
“In the midst of these difficulties come opportunities — opportunities to reform government, opportunities to rethink our priorities, opportunities to make government more accountable and more responsive to the needs of the day,” Rell said.
Rell also said her budget “sets a fundamentally new vision for state government.”
It doesn’t.
Saying we have to cut back to essentials, just as families in an economic crisis must, is not a new vision.
Saying we have to stop hiding our heads in the sand about the cost of government and the effect of the recession on our state is not a new vision.
It is sane. It is rational.
But it is not a new vision.
Rell is not truly trying to reinvent state government.
She is only trying to contain its growth and impose a bit of management.
In the flush times, Rell actually wanted to expand state government and state spending. It was Rell who broke the budget cap.
But at least she has the wit to admit we are in trouble and must trim our sails and change course.
And she has the guts to put controversial proposals on the table.
Why do we have a commissioner of higher education?
Why can’t public employees sacrifice if everyone else must?
Why can’t the size of the state workforce and the number of programs and functions the state runs be cut back in tight times?
Our state commissions on every subject and subset of humanity, from dust mites to Descendants of Norway, are insulting and absurd. We should have gotten rid of these special-interest commissions years ago.
Rell’s reasonableness is hardly revolution.
But it will seem that way to some, and the screaming will begin yesterday.
She may not be a visionary. But there is much to be said for sanity.
Of course, one man’s essential is not another man’s.
In a family (Rell likes family analogies), one partner may want to cut back on cable TV, and the other might see that as essential. One might say, “Let’s cut the travel budget or the wine budget.” The other might say those things are essential.
Beware the spouse, or politician, who says no change is necessary.
The discussion about priorities, and what deserves to be cut more and what less, and what is altogether essential and what is clearly nonessential, is politically necessary and constitutionally mandated. Other voices must be heard from now. Some will say, for example, that the child advocate’s office saves lives. New buildings at UConn, or Southern, or Eastern, are nice but not a matter of life and death. Yes, send the child advocate to the AG’s office, some will say, but with full staffing and funding. Let UConn take a bigger hit than something like the child advocate’s office.
And so it will go. This is just one example.
Let the discussion and pulling and tugging begin.
But let anyone who says, “no, don’t cut that,” find a corresponding cut for every line item he wants to keep.
Rell knows she can’t win on every item. Nor should she. But she should win on the big point: We need more efficiency and a lower price tag for Connecticut state government.
Give Rell credit. She is forcing us to be real.
She is forcing us to be intellectually honest and admit that we must pull back and figure out where and how right now.
She is forcing the land of steady habits to change.
Rell is an unlikely radical. She still seems like Shirley Partridge at heart.
But honesty and change are radical in their way. A little change is a lot in politics, especially Connecticut politics.
It took courage for Rell to start the conversation.
Let’s not change the subject. Governor's vow is welcome but hard to achieve Norwalk Hour editorial February 5, 2009 In an unusual move, Gov. M. Jodi Rell took the case for her budget, which she presents today, declaring it must be Spartan in the face of ever-declining revenues.
While some of her critics might call it a political ploy, she wasn't warning of something of which we were unaware. Still, it was a case that had to be made.
From a political standpoint, she risked reminding Connecticut residents of President George H.W. Bush's unfortunate pledge 20 years ago when he said, "Read my lips -- no new taxes."
She has pledged there would be no new taxes to meet the crisis and we hope she can carry it off.
She is aware that the Democratic-controlled General Assembly has a veto-proof majority and is placing the responsibility in their court. The governor maintains that the problem is not so much a drop in revenue but in the size of government.
She had promised no new taxes, but she also has said there would be no layoffs. This as the state deals with a deficit in the current budget that is now pegged at $1 billion.
Even more dire are the prospects for the biennium shortfall, estimated at $6 billion. Where do you cut? Public safety, education and the health sector all fall into the essential category -- what does that leave?
State unions should consider renegotiating contracts, drawn up in more profitable times?
Meanwhile, every community in the state is looking to Hartford for relief as they deal with their own budget crises.
It is apparent that there will be little, if any, consequential aid coming from Hartford. If there ever was a time to hold back on the unfunded mandates it so easily imposes on communities, it is now.
There should be a moratorium on any new laws that would cost municipalities -- not the state -- more money.
No doubt every one of the 169 towns and cities in Connecticut is looking to the federal government for a share of the economic stimulus money, as is the state.
We realize that Democrats have a tight grip in the General Assembly but hope they won't flex their muscles in a partisan way.
We need all lawmakers -- Republican and Democrat -- to work with the governor as we seek a way out of the economic morass.
The governor has pledged no new taxes, and we hope she's right. We might remind her of one political adage, however -- never say never.
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