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 and $955.5 million borrowing.
Four Democrats in the Senate joined their Republican colleagues in voting against the proposal. Democratic Senators Donald DeFronzo of New Britain, Joan Hartley of Waterbury, Ed Meyer of Guilford, and Andrew Maynard of Stonington voted against the budget.
Senate Republicans expressed concern that the 2011 budget adjustment didn’t even begin to tackle the more than $3.8 billion deficit in 2012.
“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 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.”
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 the budget 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 $955.9 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 $955.9 million in Economic Recovery Revenue bonds, which don’t fall under the state’s bonding cap, out into 2011 rather than having to create a hole in 2010. Rell had proposed creating a deficit in 2010 to borrow notes, but Democratic lawmakers said since 2010 is already balanced the date was pushed back until 2011. Meanwhile lawmakers said they’ll keep their fingers crossed and hope revenues improve over time to reduce the amount and eight year time frame for the borrowing.
Plans to use $28.7 million a year from the Energy Efficiency fund, which helps fund energy audits that residents and commercial businesses use to lower their energy costs, received some criticism from environmentalists.
Environmentalists say lawmakers are being hypocritical passing green jobs bills 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.
“We are disappointed that our customers’ electric bills are still being used as the state tax vehicle to address the budget gap; and by the short-sighted decision to cut green jobs by taking a portion of the Energy Conservation and Load Management Fund to address the same budget shortfall,” Tanya Meck, spokeswoman for Connecticut Light and Power, said Tuesday.
The 33 percent annual surcharge for each of the three utilities will help the state pay back a portion of what it intends to borrow over the next eight years. Staples said the reliance on each based on the expiration date of the surcharge will be staggered.
Rep. Cameron Staples said Tuesday he understands some people aren’t happy with the decision to take money from the Energy Efficiency fund, however, the budget compromise tries to off-set it by creating an $18 million revolving loan fund for residents and businesses seeking to increase their energy efficiency. The loan fund will help leverage $75 million in private investment, Staples said.
Meyer said he voted against the budget Wednesday because it took one-third of the money dedicated toward energy efficiency. “We’re raising energy costs and we’re losing jobs,” Meyer said.
In addition to the fancy fiscal gimmicks the 2011 budget cuts about $177 million in spending and sweeps $9 million from the Banking Fund, $8 million from Connecticut State University reserves, $5 million from the Citizens’ Election Fund, and $5 million from the Community Investment Act.
Rell has already sent out a joint statement with the legislature’s Democratic majority saying she will sign the budget.
Meanwhile the House finished up the nine judicial nominations and passed them along to the Senate for final passage. Read more about the judicial nominations and the controversy here.