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The Connecticut Mirror
Gov. M. Jodi Rell is relying on $365.6 million in anticipated federal stimulus dollars, plus $20 million from the introduction of Keno gambling, to help balance the budget for the fiscal year that begins July 1, but her plan could leave a $2.7 billion shortfall for the next governor.
She will not propose any tax or fee increases in the $18.910 billion budget for 2010-2011 that she will present to the General Assembly at midday, according to briefing materials distributed by the Office of Policy and Management.
Total spending would rise by six-tenths of one percent over the current year.
As previously announced, she also will defer a $100 million contribution to the state emloyee retirement system.
For the second consecutive year, the state will be relying on one-time revenue sources -- stimulus money, sales of assets, borrowing , spending down reserves -- that will pose problems for the next governor, who will take office next January. Those revenues total about $2.7 billion, officials said.
"Fiscal year 2012 and fiscal year 2013 are going to be very difficult years," said Robert Genuario, who oversees the budget as secretary of policy and management.
"Our energies were focused on balancing this budget," he said.
Genuario said the biggest chunk of the stimulus money will come in Medicaid enhancements that have been included in all federal budget proposals under consideration in Washington. He valued Connecticut's share at $265 million.
Under a concession deal reached last year, the state cannot institute layoffs. But Genurario said retirement incentives last year have dropped the state payroll from 57,000 to 53,000, though the comptroller's office said recently there are nearly 55,000 employees or full-time equivalents.
Looking ahead to the fiscal year that begins July 1, Rell proposes to trim the state's biggest single account – Medicaid – by eliminating coverage of most over-the-counter drugs, instituting copays for prescriptions, and reducing coverage for vision care and non-emergency transportation.
Forty-five states now require co-pays for Medicaid, Genuario said. Co-pays will be capped at $20 per month and "vulnerable populations" will be exempted.
Monthly co-pays for older residents who now receive Medicare will rise from $15 to $20.
Rell would maintain or increase most forms of muncipal aid in the next fiscal year, Genuario said. She also would allow municipalities to post certain legal notices on line instead of advertising in newspapers, which already are reeling from falling ad revenues.
She would prohibit any new unfunded mandates on towns without a two-thirds vote of the General Assembly.
Rell is seeking several budget reforms, including the ability to unilaterally cut state accounts as much as 15 percent, depending on the extent of a shortfall.
She would have all bond authorizations be automatically repealed and stricken form the books if not used within five years. Genuario said the unused authorizations hurt the state's credit rating.
The governor also proposes to institute a top-to-bottom review of state government that make draft recommendations in December 2010, a month before the next governor takes office.
Despite the state's heavy bond debt, Rell is proposing a $100 million bond authorization to help small and medium businesses with loans of up to $3 million. One-quarter of the funds will be reserved for small loans of no more than $300,000.
Another economic development effort would be a loan forgiveness program aimed at those who earn degrees in targeted fields, including green technology, life sciences and health-related technology. The program would be for graduates of state schools who remain in Connecticut. The maximum benefit would be $10,000.
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