It should come as no surprise that at least a portion of Gov. M. Jodi Rell’s annual budget address Wednesday will be dedicated to the economy and job growth.
Sources say she will propose modifying a little used job creation tax credit reserved for large corporations and aim it at small businesses with 25 or fewer employees. The $2,500 tax credit for any new job created by a small business will be applied to an employer’s personal income tax liability for three years.
Rell will dedicate $10 million for this initiative and estimates it will create 4,000 new jobs.
Rell will also propose a sales tax exemption for machines, equipment, tools, materials, supplies, and fuels used by companies focused on renewable energy and green technology.
But new initiatives like those above probably won’t dominate Rell’s last State of the State address, which will be heavily focused on the state’s dim fiscal situation.
On Tuesday Rell sent out a press release outlining her proposals regarding changes to the contributions to the Rainy Day fund, creating a group to examine the growing debt caused by years of underfunding the state’s pension obligations, and is asking the legislature again to increase her budget rescission authority.
She already used an executive order to create the pension review panel, but she will need the legislature’s approval to increase her budget authority. It’s not likely the Democrat-controlled General Assembly will oblige.
Under existing laws, the governor can make rescissions when a budget deficit is greater than 1 percent of the General Fund.
The governor’s current rescission authority is limited to up to 3 percent of the total appropriation from any fund or 5 percent of any appropriation.
Rell would like to see it increase to 6 percent of the total appropriation from any fund or 10 percent of any appropriation when a deficit of 3 percent or more exists and up to 10 percent of the total appropriation from any fund or 15 percent of any appropriation when a deficit of 5 percent or more exists.
Democratic lawmakers have argued that Rell hasn’t used all the rescission authority currently at her disposal.
When Rell first made the proposal in December, Sen. Majority Leader Martin Looney, D-New Haven, called the legislation a “smokescreen.” He said Rell hasn’t used the full extent of her current rescission authority. He said she’s looking to act like a “strong executive,” but “shied away from using her executive authority.”
Stay tuned for more news throughout the day.