HARTFORD – Facing an unprecedented cash flow crisis, House Republicans today railed against more borrowing by the state Bond Commission to pay for daily government operations, including state employee salaries and expenses, casting a spotlight on just how precarious the state’s finances have become.

House Republican Leader Lawrence F. Cafero Jr., of Norwalk said, “We cannot continue to borrow hundreds of million of dollars for operating expenses and claim that it will pay for large capital projects when the reality is that may not be the case.’’

Republican House member Vincent Candelora broke with protocol and voted against borrowing another $520 million that is technically earmarked to pay for capital projects, including high speed rail improvements. Based on documents released today, however, it is clear that the newly borrowed money will also have to pay ongoing state expenses or the state risks going broke.

According to State Treasurer Denise Nappier, unless the Bond Commission authorization of $520 million goes through, Connecticut would have just one week’s of cash in hand to pay for all bills coming due. Connecticut uses a Common Cash pool to pay for all of its obligations, from day-to-day operating expenses to construction projects. As tax revenue has diminished in the last year from 75 percent of the overall pool to now 50 percent, Connecticut’s over reliance on borrowing just to pay the bills has become acute.

“I cannot support using the state Bond Commission as an ATM to fund every day government expenses. Dedicated bond funds should be used for bridges, highways, rails and schools, not to balance the state budget that is saddled with programs we cannot afford,’’ Candelora said. “You cannot tell taxpayers this huge sum of money will pay for rail improvements – or anything else – when you know that is obviously not the case.’’

Candelora voted against authorizing any new borrowing because he said it was clear to him that the use of the $700 million the state borrowed a year ago for “cash flow’’ issues was directed at individual projects instead.

Candelora said Connecticut will close its books this year with a cash account that is 60 percent less than last year. If revenues from all sources, from taxes and fees to federal resources, plummet the state could find itself without enough money to pay its bills

“Ignoring the problem will not make it go away,’’ he said.

The campaign finance reform law established the Citizens Election Fund (CEP) which provides taxpayer money for qualifying candidates for use in their political campaigns. A previous court ruling declared the prohibition of lobbyist money to be unconstitutional.

A federal appeals court found that supplemental grants triggered by an opponent’s spending are also unconstitutional. As a result, Democrats in the legislature are looking to increase the amount of taxpayer money candidates for governor can receive for use in the general election. They have proposed increasing the expenditures for each major party candidate from $3 million to $6 million each.

“We understand that the courts are changing the rules in the middle of the game,” said House Republican Leader Lawrence F. Cafero, Jr. “But we also have to recognize that the state is bleeding red ink. How can we seriously propose spending $6 million more in taxpayer dollars for political television ads, bumper stickers and lawn signs while at the same time we are asking everyone else to cut back?”

Cafero noted that since the courts had ruled lobbyist money cannot be prohibited, donations in $2,500 increments from individuals, including lobbyists, to gubernatorial campaigns up to the $3 million mark for each campaign would level the playing field without using more taxpayer dollars. House Republicans will offer an amendment to do just that.

Democrats are also proposing that lobbyist contributions should count toward the financial goal of campaigns qualifying for state grants. House Republicans oppose that effort.

“Proponents of taxpayer-financed campaigns have said all along their purpose was to take the influence of lobbyist money out of politics,” said Cafero. “Yet, by allowing lobbyist money to count toward helping a candidate qualify for money from the CEP program, it can be argued that they might now have more influence than they did before.”

House Republican Lawrence F. Cafero, Jr. reacted to news today that the State of Connecticut did not make the cut in the competition with other states for $175 million in federal “Race to the Top” school funding. The anticipation of the funding was a centerpiece of SB 438, An Act Concerning Education Reform in Connecticut. Without that funding state taxpayers will now be expected to foot the cost of implementing that legislation.

The bill created a number of mandates on municipal school districts. Among them is the requirement that all districts increase graduation credit requirements by 25%. During floor debate on May 4^th, Cafero warned that if the measure failed to qualify Connecticut for the “Race to the Top” funding, Connecticut taxpayers would be footing the bill for a massive and pricey expansion of public school bureaucracy. Today, Cafero said his prediction has come true.

“The attitude in the legislature has been that there’s no need to worry because someone else is going to pay for this,” said Cafero. “We all watch our local school systems and boards of education scrape for every dollar they can to educate our kids. Now, thanks to this irresponsible outlook, there is a $34- $41 million tab that will have to be paid either by our municipalities or state taxpayers. Either way, we all take the hit. This is the kind of thinking that has gotten us into the financial mess we are in now.”

Cafero also noted that U.S. Secretary of Education Arne Duncan had indicated that successful applications for “Race to the Top” would include significant institutional changes, not simple tweaks. Among those enumerated were changes to the collective bargaining process, something that legislative Democrats refused to put in the bill. “Today’s results were pre-determined,” said Cafero. “The fact that Democrats did not make the changes the Department of Education sought guaranteed failure.”

Republican concerns that the bill’s passage would result in the huge bill to taxpayers they are now due to get caused the bill to pass largely on a party-line vote of 106-38.

“We aren’t winning any ‘Race to the Top’ to improve state education, but we certainly are winning the race to spend more money that our taxpayers don’t have,” he added.

Cafero was cited for his contribution to the interests of all service members and for going “above and beyond the call of duty,’’ for veterans and their families. He was introduced by American Legion official John Monahan.

Cafero told the audience, “This award means more to me than any other I have ever received in my life.’’ Cafero said society must never forgot the sacrifice and commitment that veterans have made for their country and that too often we lose track of the struggles that they have endured.

“From someone who did not serve, to those who did…thank you, thank you thank you,’’ Cafero told the crowd. Numerous past commanders were also honored for their service to the organization during the convention.

Cafero has consistently supported veterans’ issues over the years and has enlisted public recognition of veterans and their families. Cafero spearheaded the drive to exempt 50 percent of veterans’ pensions from state income taxes. He also helped dedicate a commemorative Support our Troops Connecticut license plate and exempt Gold Star families from paying additional fees for their license plates.

Cafero Keeps Up Family Tradition
By FRANCIS X. FAY JR.
Hour Senior Writer

Thirty-five years ago this month, a young man went to the podium during commencement exercises of the Norwalk High School Class of 1975 and as president welcomed a large assemblage to the outdoor ceremony with a short speech that resonated with a maturity not often encountered at such events. The graduate would go on to an active role in society as a lawyer, school board member and chairman and for almost two decades one of this city’s representatives in the General Assembly.Such popularity would be enough for most lifetimes, except that House Minority Leader State Rep. Lawence F. Cafero Jr. was to marry his UConn sweetheart, Barbara Englert, a former head cheerleader and honor student St. Mary High School in Greenwich and still a longtime Xerox sales manager. And they would have three children, a daughter then two sons, all raised at the same address in Weed Avenue.

And unlikely as it might seem, each of those children have become president of respective classes at Brien McMahon High School, with the youngest and last, Nicholas, offering the president’s welcome Tuesday night for the Class of 2010.

“My wife and I worried when he first went to high school about shoes he would have to fill in the wake of his sister and brother, but he handled it very well,” said Cafero.

“I was aware of their worries, but I decided I would just be myself and let things evolve naturally,” Nicholas said.

The youngest of the trio was involved in the BMHS music program and will continue studying the art form at the University of Virginia. He plays a wind instrument, but he also stood out as the leading man in the BMHS spring production of “The Music Man” as a senior in his first crack at the stage.

Firstborn Jacqueline, president of the BMHS Class of 2004 who flew home from her job in London for her younger brother’s performance, was joined by brother, Christopher, president of the BMHS Class of 2006. She is a graduate of the University of Virginia after two years at George Washington University from which brother, Christopher, graduated last month.

Coincidentally, Cafero’s comic personality and gift of mimicry also brought him the presidency of major organizations at both the University of Connecticut and Western New England College School of Law. And as if that isn’t enough, a cousin of the Cafero clan, Jake Passero, gave the presidential welcome the night before for the Norwalk High School Class of 2010.

Cheering for his grandson at the BMHS ceremony, too, were 90-year-old grandfather Lawrence F. Cafero Sr., Ph.D., retired Norwalk middle school principal, and his wife, Helen.

“This is what life’s all about,” said Grandfather Cafero.

Cafero, who represents Norwalk, urged his constituents to register for CT Alert via a recently-launched Web site www.ctalert.gov. The system provides a way for authorities to get critical information to hundreds of thousands of residents and businesses in times of emergencies, such as natural disasters or even a public health crisis. Local and state officials teamed to develop it.

Some communities in Connecticut used the system during headline-grabbing spring storms that knocked out power and wreaked havoc in the lives of residents.

Republicans said the state should get out of the business of running state-owned airports Bradley International and Brainard Field, and create a quasi-public airport authority that would bring in an estimated $800 million this year.

“We have to re-order how the state of Connecticut does business, our fiscal crisis demands it. This is a bold step forward that will reduce the size and scope of government because we cannot afford to continue in the direction we are headed,’’ House Republican Leader Lawrence F. Cafero Jr., said.

“The budget the Democrats insisted on does nothing to address the nearly $4 billion structural hole we will confront in just a few months,’’ Cafero said.

Republicans revised the budget they presented April 15 that has no tax increases by committing additional income tax revenue to reduce the borrowing in the Democratic budget by nearly $500 million. The sale of the two airports would eliminate the Democratic proposal to borrow at least $996 million for current operating expenses.

“There is no ‘securitization’ in our budget and no additional taxes after the Democrats raises taxes by at least $1.2 billion last September,’’ Cafero said.

He added, “We believe we have a better way out of this fiscal mess that is only made worse by the legislature’s refusal to deal with the structural holes that have been created,’’ Cafero said.

Republicans rolled back spending levels to 2009 – just a year ago – and proposed numerous agency consolidations and concessions from state employees.

The Republicans said their budget would result in smaller state government through a series of steps:

• Early retirement to reduce the state workforce by at least 1,000 workers;

• Consolidation of leased state buildings that are currently operating at less than capacity. Those buildings would house fewer workers after the early retirements that state workers are clamoring for and the state would not renew leases once the terms end;

• Consolidation of state agencies would continue the process of downsizing state government;

• Privatization of state operations such as maintenance of state properties, parks and forests.

In addition, the budget proposes reducing the size of the state’s prison population by 500 inmates. Under current law the Department of Corrections can contract with other states to have prisoners incarcerated outside of Connecticut. The proposal and would save an estimated $2 million, according to the Office of Fiscal Analysis

Republicans planned to offer the budget as an amendment to the Democratic budget.

House Republicans have a plan to erase the more than $700 million deficit Connecticut will face in the new fiscal year beginning July 1—without increasing your taxes.

On the last day Connecticut residents have to mail in their tax bills, Rep. Larry Cafero and House Republicans unveiled their 2011 budget that erases the $736 million deficit for 2011 without raising taxes by consolidating government agencies and shrinking the public workforce and commits $74 million to stimulate job growth. The balanced plan preserves municipal and school aid, and sets aside $74.5 million to stimulate job growth. Companies that hire the unemployed can earn $17.5 million in tax credits, and the plan establishes a $25 million small business revolving loan fund, and eliminates the Business Entity Tax.

“We must fix the budget hole we face in three weeks without raising taxes and without gutting social service programs. We must make government smaller and do away with programs we can no longer afford. Every household in Connecticut has faced these choices and has made the tough decisions we are confronting today,’’ said House Republican Leader Lawrence F. Cafero Jr.

“This balanced budget requires everyone to help solve our ongoing fiscal crisis. If we ignore the problems now, they will become insurmountable,’’ Cafero said. He said it offers a flexible menu of choices to create savings from concessions that have all been validated by the non-partisan Office of Fiscal Analysis.

The hallmarks of the savings:

• $58 million in line item cuts to 2009 levels;
• $64 million in early retirement for state workers;
• $10 million in state agency consolidations;
• $6.4 million to shed state office leases;
• $20 million in privatization of state functions;
• $150 million in state worker concessions, including wage freezes, furlough days and health care
• $3.8 million in legislative pay cuts, elimination of franked mail and travel.

The budget also makes significant investments in job creation and retirement security:

• $200 million will be paid into the state employee pensions;
• The Business Entity Tax is eliminated to save companies $32 million;
• A Small Business Revolving Loan Fund of $25 million is created;
• Tax credits of up to $17.5 million will be available to companies that hire off unemployment rolls.

Cafero said that the legislature took the first step toward filling the state’s budget hole on Tuesday when the House voted to erase the current state budget deficit of $350 million for 2010. The legislature cannot adjourn on May 5 without finishing the job and addressing the $700 million that looms July 1.

Republicans outlined a variety of small and large potential savings in the state work force. Cafero noted that if all state workers agree to freeze wages for one year it would save $183 million. One furlough days results in a $9 million savings, he noted.

“We cannot walk away from the fiscal crisis that has been created by declining revenues and a refusal to cut spending. More than 100,000 people have lost their jobs in this recession and families are hurting. Raising taxes will not solve the problem and walking away and ignoring what we are facing this summer would be an act of cowardice,’’ Cafero said.

He called upon Democrats to immediately come together as we did on April 13 and work toward a reasonable solution.