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.