Gov. M. Jodi Rell yesterday opened Connecticut's legislative session with her state of the state address and budget adjustment proposals for fiscal 2009, which included an $89.3 million increase in the operating budget and an additional $81.8 million of general obligation bonds in the capital budget.

Rell noted that the adjusted budget does not exceed Connecticut's state spending cap, nor does it raise taxes. She said that while more than three dozen states have or are projecting budget deficits and facing deep budget cuts or steep taxes, that was not the case in Connecticut, which currently has a projected budget surplus of about $263.2 million for fiscal 2008.

"Ladies and gentleman, the state of our state is strong - and I will do everything in my power to keep it that way," the governor said. Still, she acknowledged that her optimism was "tempered by the realities and uncertainties that mark this time in our history."

Rell and state lawmakers last year passed a two-year, $36 billion spending plan for fiscals 2008 and 2009. Rell yesterday called for adjustments to the fiscal 2009 budget, with the proposed operating budget standing at $18.5 billion, up from the previous $18.41 billion. A large chunk of the proposed budget growth is in health care, as the Department of Social Services is expected to require an additional $78.4 million, of which $63.1 million is for Medicaid.

Rell's proposed increase of $81.8 million of GOs in the capital budget would bring the total fiscal 2009 GO authorizations to $1.47 billion.

The largest addition to the GO budget is $42.9 million for conservation and development. Included in this is $15 million for Connecticut's State Parks and Forests Stewardship Program, which would allow appropriate repair, maintenance, or improvement to any state facility or structure that would provide public access or enjoyment of the state parks and forests.

If approved, $20 million also would be used for the state's Cultural Treasures Capital Program, which would be administered by the Connecticut Commission of Culture and Tourism to provide grant financing to assist with capital improvement projects for arts and cultural organizations, tourist attractions, and historic structures or museums.

Also, of the GO increase, $14.7 million would go towards general government, $11 million for corrections, $6.3 million for health and hospitals, $4.5 million for regulation and protection, and $2.4 million for transportation projects from the state's Department of Transportation.

In addition to the budget adjustments, Rell said that Connecticut's DOT had become "too bureaucratic, too inefficient and too single-minded in its problem solving approach." She said that "bold" reforms were necessary and called for an end to the old DOT. Instead, Rell proposed two new focused departments, including a Department of Highways and a separate Department of Public Transportation, Aviation and Ports. She proposed the transformation be completed by Jan. 1, 2010.

"In this way each agency will be able to focus on its own goals - and the standing public transportation, and all of its ramifications for responsible growth, will be enhanced," Rell said. "I want to give rise to a culture of change, opportunity and reform at DOT."

Rell proposed finding a workable property tax cap for Connecticut, as 43 other states have done. She also asked lawmakers to confront and fix the lending practices that contributed to the present subprime mortgage crisis. q

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