Cafero Unveils $700 Million Budget Fix; No Tax Increase

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.