(Updated) Republican Gov. M. Jodi Rell passed the fiscal football back to legislative leaders Monday when she handed off her plan to close the more than $730 million 2011 budget deficit.
After meeting with legislative leaders for less than an hour Monday, Rell exited her office to confront the handful of reporters waiting outside her office door. Rell didn’t reveal many details, but she did say it included another early retirement program for state workers, no tax increases, and no cuts to municipal aid.
Lawmakers also said Rell is looking hard at delaying another $100 million payment to the state employee’s pension plan in 2011. Depending on how far the state’s revenues dip, Rell would be able to—under the contract with the state employee unions—delay the pension payment without legislative approval.
House Speaker Chris Donovan and Sen. President Donald Williams said they will have the non-partisan Office of Fiscal Analysis look over Rell’s proposal, which both agreed includes cuts they’ve seen before.
“We’ve seen various proposals in this new proposal before,” Williams said. “We want to review her proposal and the cuts that are in there including some we’ve rejected in the past.”
When asked if she presented a revenue stream the state can borrow against to come up with $1.8 billion over the next decade, Rell said, “No, we’re working on those numbers.”
When lawmakers and Rell approved the two-year budget last year they agreed to securitize $1.3 billion, which over the next decade becomes $1.8 billion, because they couldn’t come to an agreement on spending cuts or taxes increases equal to that amount.
In the two-year budget they agreed to have Rell’s budget office and the Office of the State Treasurer come up with a list of revenue streams the state could consider borrowing against.
That list was presented to the legislature Feb. 3. Then on April 6 the Finance Committee approve a bill that sells future revenue from charges on consumers’ electric bills.
Last week, Rell’s office said she would veto the Finance Committee’s approval of a bill which would ask consumers to continue paying more for electricity, rather than allowing a state-mandated charge to cover the cost of deregulation to sunset.
When pressed for a reason Monday, Rell said, “I’d like to tell you it would be today, but we still have some numbers that we’re waiting for.”
Rell said she still thinks Keno is a viable option, but “not everybody agrees with me.” As far as plans to take a percentage of consumers’ electrical bills, “I have never liked that option from the beginning,” she said.
Donovan said he expects the governor to give them a securitization proposal in “a couple of days.”
If the state fails to securitize $1.3 billion there will be a $1.3 billion hole in the 2011 budget, which is larger than the estimated $730 million deficit.
“I don’t like the concept of securitization,“ Rep. Cam Staples, D-New Haven, said Monday. “I rather we come up with an ongoing stream of revenue, like a progressive income tax, to deal with the deficit in 2011 and beyond.”
Rell allowed for a slight increase in the income tax during budget negotiations last year, but allowed the budget to go into effect without her signature.
House Minority Leader Lawrence Cafero, R-Norwalk, said even though the governor has the responsibility to put forth various options regarding securitization, “the final decision as to what option is chosen is that of the legislature.”
Sen. Minority Leader John McKinney, R-Fairfield, said he doesn’t think there’s enough support in the House or the Senate to pass a securitization plan that asks consumers, mainly Connecticut Light & Power customers, to continue paying more on their electric bills.