As promised Gov. M. Jodi Rell officially signed the 2011 budget bill Friday, which increases spending less than one percent, borrows $989 million to cover the deficit, and doesn‘t increase taxes.
Rell touted the budget, which was a compromise between her and the legislature’s Democratic majority, as a package that “avoids major cuts in services to the elderly, disabled and poor and maintains state aid for education and municipalities.” She also said the borrowing scheme saves the state from creating a $216 million structural hole in future years.
However, Rell’s own party has criticized the budget saying it didn’t cut enough spending or shrink government in ways that would help reduce the structural deficit in future years.
In addition to the budget Rell also signed one of the two jobs bills passed by the General Assembly. The jobs bill she signed Friday provides up to $500,000 in loans and lines of credit for small businesses and nonprofits; creates tax credits and a cap of $200 on insurance premiums for small businesses that create new jobs or hire workers with disabilities; and gives angel investors a 25 percent credit on their income tax for up to $100,000 in investments in bioscience.
Since the beginning of the 2010 legislative session, Rell has signed 25 bills.
Yesterday Rell vetoed her first bill of the 2010 session.
The bill, which Rell returned to the Secretary of the State without her signature, would have allowed the Municipal Interlocal Risk Management Agency postpone dealing with a close to $10 million deficit.
MIRMA was established in 2002 as a purchasing cooperative to help offer workers’ compensation insurance municipalities at a time when municipalities were having difficulty finding affordable workers’ compensation insurance.
“While the establishment of MIRMA satisfied this need of a less expensive insurance option, its enabling legislation exempted it from nearly all of the provisions of the statutes relating to insurance and capitalization requirements, laying the foundation for the current precarious situation,” Rell wrote in her veto message.
Rell points out in her veto message that MIRMA’s deficit has grown by over 300 percent in the last six years – from a deficit of $2.2 million in 2004 to approximately $9.5 million currently, and is predicted to reach well over $15 million by 2013.
“This Act postpones the inevitable– the insolvency of MIRMA – at the further expense to towns, injured workers and taxpayers,“ Rell wrote. “No other insurer in the State would be permitted to operate with so little capital for so long.”
Instead of signing the bill Rell said she will direct the Insurance Department Commissioner and the Office of Policy and Management to undertake a comprehensive review of MIRMA’s viability and make recommendations no later than June 30.