Gov. M. Jodi Rell last week proposed a deficit mitigation plan to close a nearly $470 million gap in Connecticut’s current 2010 fiscal year. The plan includes agency and program cuts, fund sweeps and $84 million of cuts to aid to municipalities. Legislative approval will be required for $116.3 million of the proposed cuts.
“It is deeply painful even to suggest these cuts — and yet they are unquestionably necessary,” Rell said in a press release. “State government cannot afford, literally or figuratively, to allow this budget — which has only been in effect a few short months — to grow any further out of balance.”
The Republican governor plans to call the Democratic-led General Assembly into special session in the near future to cut the deficit.
The executive branch’s budget agency, the Office of Policy and Management, this month estimated the current-year budget deficit would be $466.5 million. A planned 0.5% sales tax reduction for January will not take effect due to worse-than-projected tax collections. The enacted legislation required tax revenue to be within 1% of original projections in order for the cut to occur. Rell said foregoing the sales tax cut would shave off $129.5 million from the deficit.
Earlier this month the governor made $31.6 million of agency cuts and last week announced a further $36.1 million of agency and program cuts that do not require legislative approval.
The governor announced she was creating a panel to make proposals for mandate relief to cities and towns that would see a 3% reduction in state aid under her proposal.