It doesn’t address the structural deficits in 2012 and 2013, but next year’s $19 billion budget is balanced with $177 million in spending cuts, $366 million in additional federal funds, deferral of another $100 million in state employee pensions, and a plan to borrow $989 million.
The 2011 budget bill passed the Senate 19 to 16 around 10 p.m. and the House voted 93 to 57 shortly before midnight.
Republicans expressed concern that the 2011 budget adjustment didn’t even begin to tackle the more than $3.8 billion deficit in 2012 and the $3.7 billion deficit in 2013.
“We still left a large structural hole in 2012,” Sen. Minority Leader John McKinney said. “We could have done a better job of dealing with our deficit today.”
Simply put, Sen. Dan Debicella, R-Shelton, said the legislature is “punting to the next governor and next legislature.”
Even Democratic leaders admitted it didn’t close the structural gaps in the budget. It also doesn’t increase additional taxes in an election year.
“It really doesn’t address the deficit that we have projected in fiscal years 2012 and 2013,’’ Sen. Toni Harp, co-chair the Appropriations Committee, said. “We’re hoping for an immediate and abrupt turnaround in our economy.”
But Democrats tried to offer some perspective on the bigger budget picture.
“Things were very different a year ago. A year ago we had a $10 billion deficit,” Majority Leader Denise Merrill, D-Mansfield, said. “It’s not perfect. It’s never perfect….But none of us get our way in this chamber.”
“We emerged from a tough year and accomplished a lot,“ House Speaker Chris Donovan said following the vote. It “preserves what’s good about our state,” he added.
The bill was a compromise between the legislature’s Democratic majority and Republican Gov. M. Jodi Rell, who signaled early on in the evening Wednesday that she would sign the proposal in an effort to get her nine judicial nominees, including her budget director, nominated to the Superior Court bench.
Instead of addressing the legislature upon its midnight adjournment, Rell decided to stay in her office. But she released a statement saying that the highlights of the legislative session for her were the passage of a jobs bill, expansion of the University of Connecticut hospital, and a DEP permitting reform bill.
“I am also pleased that we have been able to reach agreement on a budget bill that closes the $700 million deficit for Fiscal Year 2011,” Rell added in the statement. “It does this without increasing taxes or cutting state aid grants to municipalities. It also reduces the amount of borrowing.”
Sen. President Donald Williams said if last year’s Democratic budget had passed the state wouldn’t be dealing with a deficit. He said the cuts in that budget were painful and the tax increases were equitable. Unable to win the support of all the Democrats in the legislature, Democratic leadership negotiated with Rell, who in the end allowed a different budget with fewer income tax hikes to become law without her signature.
“Here we are trying to make the best of a bad situation,” Williams said about the 2011 budget bill.
Most of the bill relies on borrowing $989 million, which will be paid back through an energy efficiency program paid for by all electric ratepayers and another surcharge on consumers’ electric bills that was set to expire. The rest of the $726 million deficit was made up through improving revenue projections, spending cuts, $365 million in federal stimulus funds, and the deferral of a $100 million payment to the state employees pension plan.
The budget compromise allows the state to push borrowing $989 million in Economic Recovery Revenue bonds, which don’t fall under the state’s bonding cap, out into 2012—at which point Democratic lawmakers hope the economy will be performing better.
House Minority Leader Lawrence Cafero criticized Democrats for balancing a budget on “hope,” rather than spending cuts.
The budget bill sweeps $28.7 million a year from the Energy Efficiency fund that helps fund energy audits for residents and businesses with a goal of lowering their energy costs. That portion of the budget received criticism from environmentalists.
Environmental advocates say lawmakers are being hypocritical passing green jobs bills and then raiding the fund that pays for them. Jesse Stratton of Environment Northeast estimates that taking a portion of the fund to pay off the debt will cost the state 1,120 jobs a year.
The budget, a compromise between the Democrats and Rell, also uses $107.7 million in annual surcharges set to expire for Connecticut Light and Power customers in 2010, United Illuminating customers in 2013, and municipal electric companies in 2017.
Sen. Donald DeFronzo, D-New Britain, said he opposed the budget because of how the state plans on paying back the borrowing. He said he didn’t like that it would sweep a third of the energy efficiency funds. He said he would have preferred paying back the debt with Keno revenue.
Keno was taken off the table as a way to pay off the debt because it caused concerns about the state’s agreement with the two Indian gaming casinos.
Meyer said he too voted against the budget Wednesday because it took a third of the money dedicated to energy efficiency to pay back the $989 million in borrowing.