Budgetmaker's Wish Dream?
Posted 3/31/09
Despite all the happy talk at the beginning of the year about Democrats and Republicans working together to erase the largest state deficit in decades, so far the interaction has turned into a bickering game of “Where’s Waldo?” In this case it’s where’s the deficit?
When GOP Gov. Jodi Rell unveiled her two-year state budget plan in February, she pegged the deficit at about $6 billion. Democrats, who control the legislature, immediately assailed that figure, contending that the deficit was much closer to $8 billion, based on data they’d received from their non-partisan budget arm, known as the Office of Fiscal Analysis (OFA).
The Rell administration continued to defend the governor’s numbers. Michael Cicchetti, deputy secretary of Rell’s budget squad, the Office of Policy and Management (OPM), at one point told reporters: “The (governor’s) budget is not a fraud.”
Last week, however, Rell moved away from her February estimates, saying the recession “continues to ravage our revenue,” eroding the bottom line of her two-year proposed state budget. To parody those Mutual of Omaha ads, Democrats may have thought this was Rell’s “aha moment,” when she’d finally admit she low-balled the deficit early on, so she could write a budget with no new taxes.
The Rell team did not concede. Instead, they explained the change in deficit figures as a natural progression. “Frankly these revenue deteriorations are not altogether surprising given the worsening national economy and steep drop in almost every leading economic indicator over the last two months,” said OPM chief Robert Genuario.
To keep his game face on, Genuario stated the administration still believes the deficit will be lower than the OFA prediction. Genuario forecasts a deficit of $7.39 billion vs. OFA’s current $8.7 billion projection.
Even so, Democrats jumped all over Rell’s changing numbers. “The governor is being dishonest with the people of Connecticut; she did not tell the truth about the depth of the fiscal crisis when she released her budget Feb. 4th and she has continued to ignore the truth about the deficit we face,” said State Senate President Pro Tempore Donald Williams (D-Brooklyn), the top Democrat in the Senate.
“While governors across the country have been honest with the public about the real fiscal crisis, Gov. Rell has been more interested in poll numbers than budget numbers,” said State Democratic Chair Nancy DiNardo, “Connecticut families deserve better.”
This week, Democrats vow they’ll produce their own budget and tax package, crafted by the legislature’s Democrat-controlled Appropriations and Finance Committees. Leaders say both panels worked hard to write the money plan weeks ahead of the normal schedule to give lawmakers and the governor more time to work up a final package and resolve the deficit mess..
The pace of the budget preparation is yet another topic for bickering. “I continue to be disappointed by the lack of any resemblance of urgency from the legislature to address the state’s two-year budget,” Rell complained. “It is well past time to stop fiddling around the edges and seriously focus on the task at hand,” she added.
Democrats scoffed at that talk. Williams responded: “When (the governor) complains about delays, she needs to look in the mirror,” he said. “The vacations she and her staff have been taking have delayed labor negotiations and the securing of concessions that she promised to deliver.”
The irony of the call from both sides to speed up the action is both parties know they are going to stall in the coming weeks and play a waiting game on the budget until after the state tax filing deadline April 15th. They will await new data from the State Department of Revenue Services, the tax department, to get the latest and most accurate reading of state revenues before immersing themselves into what will surely be very difficult bipartisan negotiations to produce a final budget plan.
Such April delays are common even in years when the budget is doing well and a surplus is likely. In those cases, lawmakers, hoping cautious OFA surplus estimates are low, want to see how much extra money taxpayers have kicked in during tax season to boost potential state spending in programs designed to assure lawmakers reelections. This year, of course, the waiting game will determine if there is any good news afoot( i.e. a lower deficit), or if the recession rules and the red ink is even worse than expected.
The pessimists around the State Capitol believe the mess is so bad, lawmakers and the governor, averse to hard decisions, will dilly dally for weeks, possibly months on end before reaching an accord on the budget, maybe longer than the state income tax battle of 1991 which dragged into mid-summer.
Genuario told me recently he still believes the budget task can be done by the constitutional adjournment date for the legislature June 3rd. On this point at least, Williams seemed to agree. His goal also is June 3rd. “That is what we’re supposed to do,” he explained.