Rell Cites Growing Gap

Gov. M. Jodi Rell last week projected that Connecticut’s budget deficit has risen to more than $356 million due to falling tax revenues. Last month Rell projected a $300 million deficit for fiscal 2009, which began July 1. The state will convene a special session today to cut spending.

“The situation is serious and, as both state and federal economists have warned, it is going to get worse before it gets better,” Rell said in a press release. “It is vital that the legislature use the special session on Monday to act on the plan I have submitted to reduce state spending, and that legislative leaders continue working with me to identify additional areas to save. This is a time for leadership — no program, no constituency, and no project can be held sacred.”

The governor has proposed a combination of agency spending cuts, a tax amnesty plan, and the cancellation of some new programs. The state is not planning any layoffs, new taxes, or using its $1.4 billion budget reserve fund.

Rell’s proposal also would extend from eight to 10 years the length of bond anticipation notes that towns could sell, giving municipalities more time to pay off notes.

She has called on the federal government for a second stimulus package to help fund infrastructure projects and environmental “green-collar” jobs. The state expects to lose 11,400 financial sector jobs in three counties — Fairfield, New Haven, and Hartford.

Connecticut faces a $2.6 billion shortfall for fiscal 2010 and a $3.3 billion budget gap for fiscal 2011.

Fitch Ratings and Standard & Poor’s assign Connecticut AA ratings. Moody’s Investors Service rates the state Aa3.

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