House Republicans Offer Solution to Looming Budget Deficit

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. They pitched their plan today during a news conference at the Capitol, where House Republican Leader Larry Cafero backed by Rep. Vin Candelora (pictured) and others insisted super-majority Democrats who control the legislature make the same difficult financial choices residents make when their budgets get pinched. That means cutting back — adhering to a common sense principle your parents probably instilled in you: Don’t spend more money than you make. Unfortunately, business closures and widespread unemployment left the state without the revenue it had in the past. So, we’re left with a range of programs and services we just can’t pay for. Cafero and his colleagues view this crisis as an opportunity to identify programs that work—and those that don’t. Contraction, and savings, would follow. Democrats, meanwhile, have lobbied for hefty tax increases (even targeting sick people) to keep this ailing train—our government—chugging along as it had. Opinion polls have told us that residents favor the common sense Republican approach—one that shrinks the public workforce, preserves municipal and school aide while also setting aside money to encourage job growth.

“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,’’ Cafero told the news media.

Candelora, a Finance Committee member, explained the balanced plan would see companies that hire unemployed workers receive tax credits, and it establishes a $25 million small business revolving loan fund while eliminating the controversial Business Entity Tax—a tax businesses pay whether they turn a profit or not.

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

Here are the details:

• $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 eliminating the state’s budget woes 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 day 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.