Ken Dixon's Blog-O-Rama

Remember that $520 million in spending cuts Gov. Rell required of majority Democrats if she were to buy into $710 million in new taxes, including a 33-percent increase on those with the highest incomes in Connecticut? Well the Dems have fallen far short of that, putting whatever bipartisan budget deal could be in jeopardy.

House Minority Leader Larry Cafero, R-Norwalk, told reporters this morning that it’s more like $180 million in cuts, while Speaker of the House Chris Donovan says it’s around $380 million. So is this enough for Rell to allow to become law without her signature? Yikes. The Blogster doesn’t see the point in that. Either way it’s going to be an ugly, long day into night in the Capitol today.

Cafero: My understanding is there is no agreement between the Democrats and the governor, that they are prepared to put forth their own version of a budget that doesn’t meet the compromise proposed by the governor; that they have still shown relucatance to doing any cutting. They are claiming that they cut $385 million, though the governor had asked for $520 (million). Of the $385 I think real cuts amount to $185. There are $200 million worth of lapses and smoke-and-mirror type of reductions. They are unwilling to do any tax cuts, meaning they have not accepted the governor’s estate-tax proposal for elimination. They’ve monkeyed with that a little bit and most disturbing to me is what we were most excited about in the governor’s proposal was the reduction of the sales tax. They are not willing to commit to that. They are willing to only institutute it possibly in January with some contingencies. If certain things happen and revenue dips they say will not institute it. Even if they institute it in January, they say if certain revenues dip in the succeeding six months they will terminate it. So what they’re clear on is they want to raise taxes and not cut spending. They are certainly hedging on any job-creation proposal.

To my knowledge having spoken to the governor’s office as late as an hour ago, they would not sign that budget.

Blogster: Did they say they’d veto it Larry?

Cafero: They said they would not sign it. That’s a good point. They did not say they would veto it. They didn’t say they wouldn’t either, but they weren’t clear about that and obviously that’s a distinction. They could possibly mean it becomes law. If she doesn’t sign it in what? Ten days, it becomes law. I think the governor last week went well beyond the 50-yard line, if you will, with regard to a compromise, and she said ‘meet me halfway.’ They are not willing to compromise.

Blogster: Do you understand at this point, is the language in the back of the budget taking away her recission authority, is that language still there?

Cafero: I know that was an issue of contention as late as last night. It is my understanding there was some tentative agreements pending an entire package, which has not been agreed to. So whether or not, and I haven’t checked it yet, gone through reading it, whether they’ve reinserted those power grabs in the budget, I’m not sure of. What really bothers me is there’s no sense of urgency here. I came in this morning and I understood Senate Democrats are going to have a dinner caucus. I mean are you kidding me? It’s August 31st, we don’t have a budget and you’re going to have a dinner caucus to discuss the matter? I mean, it’s shameful?

A few minutes later, Speaker of the House Chris Donovan met reporters outside the House chamber.

Donovan: We were working on the budget all weekend, give and take, back and forth. We plan to run a budget today and it’s our hope that it’ll solve our budget deficit and we can move on. There haven’t been handshakes but we’ve been talking to each other and some things that they wanted we’ve incoporporated and we fell good about our budget. We feel it’s a good compromise budget. There’s elements of sales tax in it, there’s elements of inheritance tax in it. There’s more cuts than before, so we felt that we’ve met the challenge from the governor on reaching a compromise.  I think we’re certainly close to the $520 million (in cuts). We’re talking about $3 billion in cuts over two years. It’s pretty significant.

Blogster: Can you explain the sales-tax change you made? She wanted to roll the sales tax back. You guys are pushing it out?

Donovan: Yes, we’re pushing it out to January of ‘10, so that’s what, how many months away? And then we also have a clause, since we’re worried about revenue, since revenue has dropped last year, we’re hoping it rebounds but if it doesn’t, we have a trigger there that if we run a deficiency in revenue that can be put on hold somewhere along the way.

Blogster; Can you also explain, the back-of-the-budget stuff: there were complaints among Republicans this weekend that you were taking recission authority away from her? Is that still in the back of the budget?

Donovan: I don’t think so. I don’t think there was ever recission authority taken away. It was just changes in the way of doing things. We discussed that yesterday, last night, yesterday afternoon, all times of day, about that. And I think we’ve reconciled that….It basically said you know, certain things they could tell us what the recission is. We could have Legislative Management figure out what that amount is and figure out how to do it. More like that instead of taking away her powers….That’s a minor thing.

Blogster: Could you go over the inheritance tax also?

Donovan: Yeah on the inheritance tax we’re looking at three changes. Basically, if you have an estate under $3.5 million, you don’t pay any estate tax. Before it’s $2 million and once you hit $2 million the whole pot got taxed, so that’s a significant change. We also got rid of the so-called cliffs, so it’s just the money over that amount…Then we lowered the rates on the inheritance too, 25 percent. So we made three major changes and we feel that’s very significant.

The Blogster’s training and experience is telling him that even though Gov. Joi Rell caved on added taxes for the state’s wealthiest, Democrats will just not come up with a requisite $520 million in spending cuts in time to vote a budget on Monday or Tuesday. The majority Ds tossed out a little distraction yesterdayover an alleged revenue shortfall in Rell’s latest proposal, but Bob Genuario, secreyary of the Office of Policy and Management, told reporters this afternoon that the discrepancy was mostly ironed out. “We’re $250 million closer,” Genuario said. “It’s good news in terms of a final budget solution.” He said the Thursday issue was a “distraction from the real work.”

That aforementioned real work is Rell’s requirement that Democrats come up with $520 million in spending cuts for the two-year package. He was hoping to get them today, but as of 4:30, they haven’t arrived. What’s the status of talks? Genuario’s waiting for a phonecall over the weekend from the Ds. “If they do their job and they achieve a package consistent with the governor’s proposal and the promises they’ve given, we can get a new budget in place by September 1,” Genuario said.

Now’s the time for the Blogster to harken back to the “counch cushion” money that Speaker of the House Chris Donovan was confient could reach more than $200 million. It turned out to be less than half that, from various agency accounts.

Legislative Democrats in the know say that Gov. Jodi Rell wandered into the land of unintended consequences when she proposed eliminating the inheritance tax, which kicks in on estates larger than $2 million and can reach 16 percent on estates larger than $10 million.

 On the face of it, the proposal seemed like a 2009 version of the 1991 provision in the income-tax bill that dropped the capital gains tax and therefore attracted Gold Coast support. Rell on Wednesday proposed saving families $257 million in taxes over the biennium by eliminating the state’s death tax. It would be a carrot to go along with the stick of raising income taxes on Connecticut’s wealthiest by more than a billion bucks.

But what troubled, near-bankrupt state institution depends on millions of dollars a year from the inheritance tax? Yep, the Probate Court system, which is the focus of a massive reorganization that will reduce the 117 courts down to 50, supposedly self-sustaining courts, by the time of next year’s elections.

 Jeff Beckham, spokesman for Rell’s Office of Policy and Management, just told the Blogster that the death-tax proposal remains alive and well in the realm of active bipartisan budget negotiations. “We will have to work on a revenue stream for the Probate courts,” he said. “That is something we’ll have to do: to make sure the Probate Court have enough resources.”

The Blogster imagines that Republican Probate Court judges, from dozens of high-earning towns like Greenwich, say, getting on the horn, complaining to Rell’s office about how she wants to take away their ability to function.

Back at the start of this never-ending year of budget haggling, the nonpartisan legislative Office of Fiscal Analysis correctly pegged the two-year fiscal deficit at about $8.8 billion. So they’re not exactly the Wicked Witch of the West side of the Capitol complex today, when they’ve noticed that Gov. Jodi Rell’s newest proposed budget, in which she agreed to a so-called millionaire’s tax on joint incomes of more than $500K, is out of balance by $370 million. Add that to the $520 million in spending cuts she wants Democrats to find and we’re walking along the Yellow Brick Road in search of $900 million. I see Speaker of the House Chris Donovan as the Scarecrow, Senate President Don Williams as the Tin Man, House Majority Leader Denise Merrill as Dorothy, Rep, John Geragosian, the first-term Appriopriations chairman as the Cowardly Lion, Gov. Rell as the Wizard of Oz, and House Minority Leader Larry Cafero and Senate Minority Leader John McKinney as the palace guards with the big fuzzy hats. The Capitol Press Corps could be the Flying Monkeys and Senate Democrats could be the fruit-slinging apple orchard. The sands of the hour glass are running down to Monday midnight, when the third consecutive month without a new budget will begin. It should create an atmosphere of expedience and drama for that Monday, August 31 special-session day. Any candidates for the Wicked Witch?

 Rell’s budget office this morning is disagreeing with the OFA figures, by the way.

By early afternoon, Rell issued the following statement:

“I offered a compromise budget yesterday because I am committed to getting a budget in place by September 1^st.  The State of Connecticut needs a budget, the ingredients of a budget agreement are

now in place — and all that remains is the willingness of the Democrats to cut spending and get the job done.

If there is a disagreement on the budget calculations between the legislature’s Office of Fiscal Analysis and the Office of Policy and Management, then we will address it and identify a number we can all agree upon.  I am hoping that agreement can occur as early as this afternoon and that discussions on spending cuts will also begin this afternoon.”

 Here are some stray quotes from Sen. Chris Dodd’s news conference in East Haddam this afternoon on the death of Sen. Ted Kennedy.

“He fought like a lion this last year. He got the mental-health parity bill done, we got the tobacco bill done, we got the national service bill done, we marked up the health committee bill on July 15.Sorry we didn’t get the bill done, yet, but we will, in time. So his presence over the last year has had great value. His spirit has been there during all of these debates and while he wasn’t there to cast votes, believe me his presence was felt during the discussions, as they will be in the coming days. So, for me it’s the great loss of a great friend and a great, great advocate for the people….

Life is not a dress rehearsal. You take every day and live it to the fullest and maximize your time here on earth.”

Asked by a reporter when he first met Kennedy, Dodd said “I don’t remember not knowing him.” Kennedy served with Dodd’s father, U.S. Sen. Tom Dodd from 1962 until 1971. The Dodd scion said he met Kennedy when he was first elected to Congress in 1974. He said that Kennedy sat next to him on the health committee for years and would call him after many important personal milestones, such as the birth of daughter Grace and when Dodd’s sister recently died. He also called two weeks ago, after Dodd awoke from prostate surgery.

“He said welcome to the club, with cancer, and made some choice comments which I can’t refer to in public about having prostate surgery and what catheters mean to people. He could make you laugh at the moment you thought you could least tolerate it and would be there at the moment you needed him the most. He’ll wear well historically….

“I remember once driving with him from Old Lyme up here and we came up Joshua Town Road in the fall. I’ll never forget, he said this is the prettiest road in America.” He described “endless” sailing trips with Kennedy. “We’d be out in the middle of the ocean. I’d be his only audience. He’d be banging his fist on the side of that boat about healthcare, about mental health about what was happening to people unemployed. I’d say I’m the only audienece you don’t have to scream at me about this. But his passion about these issues was so deeply felt that it wasn’t for show. Never once did I ever see a false or phoney bone in his body when it came to caring people.”

Dodd said Kennedy’s wife told him Kennedy fought until the end. “Mrs. Kennedy said to me that the only day he spent all day in bed was yesterday. He was up everyday, from the day of his diagnosis until yesterday.”

Amid all the anticipation yesterday for a long-in-the-waiting budget deal between majority Democrats and Republican Gov. Jodi Rell, there was some kind of disconnect. While majority leaders said they were hopeful for compromise, Rell made her staff pull back late in the afternoon. It’s 10 o’clock on Wednesday and Rell has scheduled a 10:30 news conference in her Capitol office. Presumably that will give TV stations who need MapQuest to find the Capitol a chance to fire up their computers and make there way over here, on the eve of the General Assembly’s planned special-session day on bonding the 2009 budget deficit of $950 million.

Meanwhile, the guerrilla theater performers who’ve been lampooning her alleged desire to protect the state’s wealthiest, are setting up for a  scheduled noon event on the Capitol’s north steps called “Queen Antoinette and Governor Rell Invite you to Eat Cake.” There’s supposed to be free cake and the Blogster imagines there will be big-hair wigs.

The Blogster doesn’t want to spoil a surprise, or even curse the darkness, but the possibility of rolling through the first quarter of the 2009-10 fiscal year without a budget might finally be having an effect on the insulated governor and leaders of the General Assembly. Majority Democrats this afternoon may threaten to run a budget when they gather on Thursday to crazily bond $950 million (!!!!!!????) to cover last year’s debt and approve school construction projects. Meanwhile, there are rumblings in the Republican governor’s camp that some kind of compromise offer may be forthcoming that could get us out of the budget frying pan and into the eventual fire of the 2011, when there will be neither $1.4 billion in emergency reserves nor $1.5 billion in federal stimulus money to support the state’s budget.

Now could be the time to buy local spuds, since it’s the start of the Connecticut harvest season and Friends of Animals, Inc., wants you to boycott Idaho potatoes after Gov. Butch Otter (don’t you think he’d be in favor of animals keeping their pelts?) endorsed – and plans to participate in – a so-called “trophy hunt” for wolves in September, after they were removed from that state’s endangered species list in May.

The FOA quoted him saying “I’m prepared to bid for the first ticket to shoot a wolf myself,” to a group of hunters The FOA claims the wolf hunt is an apparent effort to increase elk populations, also for the benefit of hunters for hunters. The wolf permit will cost $11.50 and Idaho wants to eradicate 220 wolves, said the FOA, quoting Otter from an article in The Idaho Statesman: “You can still hate them and respect their cunning and their place in nature.”

 Friends of Animals’ president, Priscilla Feral said Otter should go to a dictionary for a better word. “Gov. Otter’s enthusiasm for wolf killing not only demonstrates a complete lack of conscience and understanding of the word ‘respect,’ it shows a lack of respect for nature and the ecosystem; wolves don’t need Gov. Otter—or anyone else—to manage them.”

 This, Friends of Animals is calling for a boycott of Idaho potatoes. One third of the nation’s potato crop is grown there. “As long as Idaho is in the business of killing wolves, the nature-respecting public should stop buying potatoes there,” she said. The FOA suggests looking for potatoes grown in Maine, Colorado, North Dakota, Oregon, Washington and other states. The Blogsteer says your local farmers markets have more than enough to keep the wolf from your door.

Friends of Animals: We are a non-profit, international animal advocacy organization, founded in 1957. Our goal is to cultivate a respectful view of non-human animals, freeing them from cruelty and institutionalized exploitation around the world.