Journal Inquirer
State enters 2nd month without budget
By Keith M. Phaneuf
Journal Inquirer
Saturday, August 1, 2009
HARTFORD — State government began
its second month without a new budget
today, as Gov. M. Jodi Rell and the
legislature remained locked in a fiscal
standoff.
And while Rell continues to allocate
state funds under executive orders,
nonprofit social service agencies that
serve the mentally ill, drug addicts, and
the mentally retarded are bracing for
further cuts.
Connecticut is now just one of three
states in the nation, along with
Pennsylvania and North Carolina, that
lacks a new budget since the fiscal year
began July 1.
Rell, who’s a Republican, and the
Democrat-controlled General Assembly
on Thursday unveiled separate revised
budget proposals for this fiscal year and
next.
But the two sides remain far apart —
both in terms of spending and taxes —
as they grapple with the largest projected
deficit in state history. Analysts say the
state will run $8.56 billion in the red this
fiscal year and next combined.
Though Rell on Thursday authorized
monthly allotments for state agencies by
executive order for the second month in a
row, not all accounts are being funded at
the level they were in the just-completed
2008-09 fiscal year.
Not only did the state run up a nearly
$1 billion deficit last fiscal year, but
revenue — based on existing tax rates —
is expected to drop roughly $1.4 billion
in 2009-10 as Connecticut struggles to
climb out of a global recession.
About $1.3 billion of last year’s $18.4
billion state budget went to hundreds of
nonprofit social service agencies that
provide the bulk of state-sponsored
services to people with developmental
disabilities, the mentally ill, abused
children, drug addicts, prison inmates,
and others.
For more than a decade the industry
— whose social workers are paid on
average half of what comparable state
employees earn — has maintained that
minimal growth in state funding has
made it increasingly difficult for small
community agencies to operate.
And while those agencies usually sign
one-year contracts that spell out their
compensation, most agreements allow
the state to reduce payment in the
absence of an approved budget.
Most nonprofits in July received a 1
percent cut from 2008-09 payments.
And in its August allotments, the
Rell administration cut grants by 20
percent for mental health services, early
intervention programs for children with
learning disabilities, and autism services.
It was unclear Friday how those reduced
allotments to the Department of Mental
Health and Addiction Services and the
Department of Developmental Services
would affect payments to nonprofits.
But the Connecticut Community
Providers Association, an association
that represents hundreds of nonprofit
agencies, said the reductions almost
certainly would mean deeper cuts to
programs serving vulnerable clients.
“These are deep cuts that make no sense
at all in terms of providing proper care
for our clients,” CCPA President Terry
Edelstein said. “We urge the governor
to reconsider these cuts, just as she
reconsidered plans to close state parks.
These services have a much greater
impact on quality of life for Connecticut
residents than closing a favorite
swimming hole.”
Another coalition that represents
social service groups, the Connecticut
Association of Nonprofits, noted Friday
that the Rell administration did keep a
pledge to fund AIDS services in August.
Funding for nonprofits that provide
those services was due at the end of July,
and while it wasn’t included in the July
budget allotments, the administration
promised it would be included in August,
said Liza Andrews, a public policy
specialist for the association.
Rell has said she has little choice but to
reduce funding below 2008-09 levels,
given declining revenue.
The governor on Thursday proposed
cigarette, liquor, and business tax hikes
worth about $391 million over two years
in hopes of reaching a compromise with
Democrats. Democrats are seeking $1.8
billion in new taxes and focusing most of
the burden on wealthier households.
Rell has said unless Democrats reduce
their spending proposals — which
exceed her budget by $850 million
— and limit tax hikes, the state will take
even longer to climb out of the recession.
House Speaker Christopher G. Donovan,
D-Meriden, said he expects Democrats
will resume a strategy they employed
in June — a tactic they suspended as
budget negotiations with Rell resumed.
Democrats had been waging rallies
and news conferences across the state
protesting Rell’s cuts in social services
and health care for the poor, as well as in
higher education.
“We’re going to go to the public again,”
Donovan said. “The public needs to
know what the governor’s proposing.”