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The legislature’s Appropriations and Finance, Revenue and Bonding committees are at the capitol today to hear directly from budget officials about the state’s poor fiscal outlook and to bat around ideas for chipping away at the estimated, $6 billion, two-year deficit.

At the same time, contractors are hard at work in the halls of the legislative office building, where the budget hearing is being held, chipping away at the marble baseboards. The baseboard replacement project is costing the state $200,000 – an expense some lawmakers argue should have been reconsidered in light of the budget hole.

Having the work continue in earnest in the midst of today’s hearing was like rubbing salt in a wound.

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The new legislative session is still about two months away, but House Minority Leader Lawrence Cafero, R-Norwalk, is already trying to sow doubts about new House Speaker Christopher Donovan, D-Meridan.

The upcoming session will focus on crafting a new, two-year state budget in the face of the national economic crisis and rising state deficits.

Republicans are suggesting state employee unions make concessions, such as open up what many consider a rich, multi-year package of health benefits for negotiation.

Donovan, the former House Majority Leader, has made a career out of working for unions. He is currently employed as a representative for the Congress of Connecticut Community Colleges Local 1973, which represents employees at the state’s community colleges.

Donovan has said he will leave that position upon assuming the Speaker’s role to avoid criticism it is a conflict-of-interest.

But it sounds like that won’t matter much to Cafero when bills impacting unions are debated in the coming session and Donovan is overseeing the back-and-forth.

“I’m a Mets fan,” Cafero told me recently. “I had season tickets. I got rid of season tickets but I’m still a Mets fan. It’s very tough to distance yourself from those intense allegiances. And when you’re speaker you have to do that. You can’t advocate for one particular special interest group.”

Cafero is not immune from accusations of conflicts-of-interest. A few years ago he came under fire for obtaining state dollars for the Norwalk Maritime Aquarium in his district. The aquarium’s lobbyists are a subsidiary of Brown Rudnick, a law firm in which Cafero is a partner.

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Newly elected state legislators had their freshman orientation today at the capitol in Hartford.

The Class of 2010 (when they are up for re-election) learned about the workings of state government and sat in on a mock session. The regular 2009 legislative session begins in January.

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Republican Gov. M. Jodi Rell and the state Department of Social Services launched the Charter Oak Health Plan July 1 to help uninsured 19 through 64 year-old residents with their healthcare needs.

But the plan has come under increasing fire from healthcare advocates and Democratic legislators for failing to sign-up an adequate network of physicians and hospitals.

And things were not looking up at this morning’s meeting of the Medicaid Managed Care Council, an advisory board of lawmakers and healthcare and insurance professionals.

Healthcare providers continued to argue Charter Oak’s rates of reimbursement are unacceptable and the plan is unlikely to lure more hospitals.

Members were handed copies of a letter from the state’s Congressional Democrats complaining of Charter Oak’s “wholly inadequate provider networks.”

And questions were raised about whether Charter Oak was properly put out to bid to managed care companies.

The continued questions and criticism appeared to get to David Parrella, a director with the Department of Social Services, who near meeting’s end cut loose with a pretty emotional, at times rambling, plea for understanding.

“We’re working with the cards we’ve been dealt,” Parrella told council members.

He said it “would be nice” if Charter Oak could provide higher reimbursement rates to hospitals and physicians, but the state does not have the money.

Parrella added due to mounting state budget deficits, DSS is looking to cut at least $1 billion from it’s overall budget.

“How do we raise that kind of money?” he said.

Parrella said at least Connecticut is making an effort to help the uninsured.

“This is one state trying to do something … Maybe you don’t agree with it, maybe it’s flawed. A lot of states aren’t doing anything,” Parrella said. “We’re not mean-spirited people and we’re not stupid … Anybody who thought health reform in this state or any other state is easy, it would have been done a long time ago.”

Sen. Jonathan Harris, D-West Hartford, a vocal critic of how Charter Oak is being implemented, responded that no one is saying DSS employees are “mean-spirited” or “stupid.”

Harris said lawmakers want to see Charter Oak work and want to have “a frank and open discussion” with Rell about how to get that done.

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I was speaking to a colleague yesterday who noted how odd it seems for politicians and pundits and reporters to focus on Stamford native U.S. Sen. Joseph Lieberman’s fate in Congress in the midst of wars and financial crises.

Then I read this today.

I think Lieberman’s rabbi, Daniel Cohen of Stamford, summed it up best when I interviewed him last week on the topic.

“He always seems to be in the middle of things,” Cohen said. “God likes him to be engaged.”

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The Hartford Courant’s Jon Lender continues to delve into the arrest of Jessie Stratton, a former legislator from Canton and Avon who in 2002 tried to challenge fellow Democrat Moira Lyons of Stamford for the position of House Speaker.

It’s interesting reading.

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The Connecticut Conference of Municipalities (CCM) today issued a six-point plan they want lawmakers to adapt to help cities and towns weather the state and federal economic crisis.

Chief among the group’s recommendations is lawmakers use the $1.4 billion rainy day fund to avoid cuts in municipal aid.

“Connecticut’s towns and cities are reeling from the body blows unleashed by the economic crisis that besets our state and nation,” James Finley, CCM’s executive director, said.

CCM for months has been warning Republican Gov. M. Jodi Rell and the legislature’s Democrat majority that less state aid equals higher local property taxes.

In a statement issued later in the day, Sen. President Donald Williams, D-Brooklyn, agreed.

Williams’ own six point plan, which includes proposals to audit state agencies, better-manage large transportation projects and also embraces recommendations made by Rell, concludes with: “Don’t pass the buck. We should avoid making reckless cuts that just shift the burden to ‘other’ taxpayers; gutting municipal aid would simply cause property taxes to increase.”

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During a press conference this afternoon to discuss the state’s gloomy financial and budgetary outlook, Ken Dixon, the Connecticut Post’s capitol reporter, asked Republican Gov. M. Jodi Rell if she would veto any budget put forth by the legislature that raised the income tax.

The General Assembly is controlled by Democrats who in 2007 sought to boost income taxes on the state’s wealthiest residents and lower them for everyone else. The bill passed and Rell vetoed it. An effort to override her veto was thwarted by Stamford’s Democrats and Sen. Bob Duff, D-Norwalk, who feared the tax hikes would hurt constituents.

Responding to Dixon, Rell said: “Raising taxes in this economy is the worst thing we can do at any level.”

As the press conference adjourned, I spoke to Rell and pointed out she did not specifically answer whether she would veto a tax hike.

She smiled and said: “No I didn’t.”