The Connecticut General Assembly

House Democrats

Christopher G. Donovan Denise Merrill

Speaker of the House House Majority Leader

FOR IMMEDIATE USE Doug Whiting

860-240-0160
December 14, 2009 203-400-2127

DEMOCRATS PROPOSE SOLUTION FOR CURRENT DEFICIT

Offer Comprehensive, Responsible Approach

 Save an estimated 5,000 jobs that would result from Governor Rell’s cuts.

 Save $38.5 million in federal dollars that would be lost from Governor Rell’s cuts.

 Save municipalities from Governor Rell’s $84 million in cuts. Explore municipal
savings opportunities and regional efficiencies.

 House Democrats will come in before the holidays to vote on legislative changes
that mitigate the deficit by $100 million.

 Demand that Gov. Rell act on a SEBAC agreement trigger to save $100 million.

 Demand that Gov. Rell pursue hundreds of millions of federal dollars left on the
table by Republicans.
o SAGA, TANF, High Speed Rail

 Work for jobs growth and opportunities to sustain the State into the future.

Room 4100 • Legislative Office Building • Hartford, CT 06106-1591 • (860) 240-8500 • hdo@po.state.ct.us
 HOUSE DEMOCRATS’ PLAN WILL SAVE JOBS,
BALANCE BUDGET

Governor’s cuts cost jobs, federal dollars

House Democrats today announced a comprehensive, $200 million-plus plan to reduce the state’s
budget deficit without sacrificing some 5,000 jobs statewide that would be eliminated through Governor
M. Jodi Rell’s planned budget cuts.

“We’re not going to let Governor Rell cost this state 5,000 jobs – unconscionable at any time, but
especially so during a recession and in this holiday season,” House Speaker Christopher G. Donovan (D-
Meriden) said. “We will save those jobs by addressing our deficit responsibly – with smart cuts and
revenue changes, available federal dollars, municipal efficiencies and job growth.”

Speaker Donovan also announced that part of the union concessions agreed to between Governor
Rell and SEBAC included a trigger for an additional $100 million in savings that Governor Rell has yet
to act upon. The agreement states that if projected state revenues are $300 million or more below the
adopted budget, as is the case currently, and the Governor exercises any rescission authority, which she
has, the “State’s contribution to the state employees retirement plan may be reduced by up to $100
million annually.”

He said the plan also will include approximately $60 million in cuts, sweeps, and spending
reductions and $40 million from a delay in changes to the Estate Tax.

Speaker Donovan outlined the House Democrats’ plan today following a caucus of House
members. He said legislators will return to the Capitol before the holidays to help mitigate the deficit.
1. JOBS CREATION, RETENTION NEED TO BE TOP PRIORITIES
Governor: Layoffs for the Holidays
 Governor Rell’s plan of 100% cuts to solve the $337 million deficit could result in a
loss of 3,800 to 6,000 jobs in CT.
 It is realistic to expect such significant job loss because of the cuts that have already been
absorbed in our state.
 OFA estimates 3,800 jobs lost in CT.
 4,617 is the estimate based a formula developed by the Center for Economic Policy and
Research.
 A quick survey conducted by HDO showed 6,000.

The state workforce has already been reduced by almost 10% or 5,000 workers.
– Reduction of 5,000 based on 3,900 taking ERIP, and not filling vacant positions out of
50,000 state EEs.
– $429M in lapses and other broad–based cuts have been absorbed (overall budget cuts of
$3 billion)
– These factors have resulted in a reduction in state services that are in higher demand than
usual, because of the economic crisis.
– Actual numbers show reduction of 5,233 to 4,124 of 51,980 to 50,871 workers.

Cutting hospitals by $87m saves the state $35m, but costs CT:
– 2,251 CT jobs lost;
– Lost CT business activity of $279,007,200;
– Including $100,495,484 lost in CT salary and wages.
– These figures were provided by the CT Hospital Association and are based on a US
Commerce Dept. formula analysis.
– Additional economic impact on nursing home, private provider and doctor payments.

Specific cuts and their impact on jobs

 Medicaid Cuts = 1,154 jobs
• Based on Families USA formula ($1M spent on Medicaid = $2.1M in new
business activity and 16.67 jobs); $27.7M in Medicaid cuts = $69.25M in
spending assuming a 60% FMAP rate
 Other Healthcare cuts amounting to $7M result in a loss of 117 jobs
 Connecticut Association for Home Care and Hospice (CAHCH) would lose 600 jobs
• Based on Families USA Medicaid Calculator ($35M Medicaid Cut)

 Adult Day Centers (Medicaid) 1460 clients will lose services, because 307 jobs would be
lost
 Visiting Nurses Association of South Central CT would lose 15 jobs
– 8 job losses are due to 5% Medicaid rate reduction
School-based health centers- 78 around the state; will have to cut services in half for the
rest of the year; Loss of wages to parents to have to leave work to take kids to doctor;
 United Community and Family Services- Community health center
 – 2 jobs already laid off as a result of the budget already passed; 5 more jobs will be lost
from the Gov's proposed Medicaid cuts; 10-15 more jobs will come from all the other
cuts the Gov proposed
 Oral Care Dental Group, New London
– 40-45% of the Medicaid load in the NL area; 10 from their office and 10 from the people
who bring their patients, who bring their supplies, who sell them their supplies, and who
transport their patients who come from nursing homes, group homes, and other facilities.
 East Hartford School Based Health Centers would lose 16 jobs
 Behavioral Health Provider, as a result of freezing SAGA Intake, would lose 105 jobs (75 FT
& 30 PT)
 Nursing Homes would lose 556 jobs due to 2% reimbursement cut (per CAHCF, CANPFA)

Anti-poverty & Support Services

• CCPA Private Human Services Providers- Preliminary survey shows that 6,215 clients will
receive reduced levels of services, 80,000 will not be able to access services (many due to SAGA
intake freeze) and 2,070 jobs would be lost

• Legal Aid (CT Legal Services, NH Legal Assistance, Legal Asst Resource Center)- $1.5M
Judicial Branch Cut would result in a loss of 40 jobs(25% of staff)

• Domestic Violence Programs estimate based on their internal survey that 18 jobs would be lost

• New Haven Home Recovery- a housing & homeless support center would lose 8 jobs

• TVCCA- anti-poverty agency in SE CT; They estimate at least 40 jobs would be lost, 25 or so in
childcare, about 5 in housing and housing-related services, and the balance across their other
programs in order to keep the agency alive.

Workforce Development Programs

• STRIVE New Haven- a non-profit workforce development would see
6 layoffs; 30 job seekers w/o services; and 23 job placements would be eliminated, for a total of
59 lost jobs
• New Life Corporation- a nonprofit, economic security; loss of job search supports; 25 lost jobs
• STRIDE Re-entry workforce development program, due to lack of post-release job support,
because they would have to close the program at Bergin Correctional, would see 70 lost jobs per
year

Democrats: Responsible Cuts, Save Jobs, Federal Dollars, Jobs Growth

-- Save over 5,000 jobs
-- Make responsible cuts
-- Make responsible revenue changes that do not affect jobs
-- Fight for additional federal dollars that have been left on the table by Governor Rell and the
Republicans
-- Work for jobs growth and opportunities
 Democrats Will Mitigate the Deficit
 $100 Million from SEBAC trigger
 Approx. $60 million in cuts, sweeps, reductions
 $40 million – Delay of Estate Tax changes
 Balance from federal funds, ongoing jobs preservation

Democrats Have a Plan to Move Connecticut Forward

 The Governor wanted to go backwards: she proposed a $10 million decrease in the Stem
Cell Research Fund and a $6 million cut in the Biomedical Research Trust Fund. This is
going in the wrong direction: these areas are engines of growth for Connecticut and a key
part of our future. Testimony showed that we are ahead of the curve, gathering grants and
showing results at UConn, Yale and Wesleyan. This research is critical to CT and the nation,
and we are doing it here.
 Majority Leaders’ Economic Round Table
• This group is focusing on job creation and being competitive in a new economy.
• They will have recommendations in mid-January on
- Providing funding for targeted businesses
- Making loans at higher risk levels
- Taking advantage of venture capital and refocusing tax credits, and
- Funding energy efficient projects
 Jobs Creation
• Look at capital dollars for possible reallocation and prioritize them for construction in
targeted areas such as transportation infrastructure, housing, energy conservation, clean water
and higher education.
• We can maximize federal dollars in many of these areas along with our own capital dollars
• Creating jobs through construction = more tax revenue for the state
• Creating jobs through construction = more spending by residents and companies
• Favorable bidding climate = more revenue, jobs and products for our investment.

Democrats, Unions Contribute When Governor Will Not

 Obama and CT Democratic delegation in DC have worked to bring almost $2 billion in
federal dollars back to CT
 State Employee Union concessions totaled almost $1 billion
 Part of the union concessions included a trigger for an additional $100 million that Governor
Rell has yet to act upon.

2. LOSS OF FEDERAL DOLLARS

Governor’s Cuts = Loss of $38.5 Million Federal Dollars
-- OFA estimates that the Governor’s cuts would result in a $38.5 million loss of federal dollars,
mostly due to cuts to health care

Democrats: Don’t Cut Funding that Brings Federal Dollars

3. AVAILABILITY OF FEDERAL DOLLARS
Governor: Failed to Maximize Federal Dollars for CT
One of the reasons the Governor is proposing such devastating cuts is because she has failed to balance
the budget in other ways. She has dragged her feet in accessing this money. If these had been
implemented sooner, it would have allowed the state to capture federal dollars at the enhanced match
rate under ARRA.

Democrats: Pursue Hundreds of Millions of Available Federal Dollars

 SAGA: DSS has refused to apply for a waiver that would allow SAGA clients to be covered
by Medicaid. $6.8 million FY 10, $38.6 million FY 11
 Charter Oak: $7 million FY 10, $11 million FY 11
 Family Planning: $2 million FY 10, $11 million FY 11
 TANF Contingency Fund: 80% federal reimbursements for spending on basic assistance,
non-recurrent short term benefits and subsidized employment for low-income people. As
much as: $130 million. To date, DSS has only applied for $4 million for caseload increases.
 Disproportionate Share Hospital Payments (DSH)
o Build the DSH funds we pay hospitals into the hospitals’ provider rates in order to get
an enhanced federal Medicaid match: $11.6 million annually
 New Haven-Springfield High Speed Rail Line – Governor removed this item from a bond
agenda and cancelled a subsequent bond meeting despite the Commissioner of DOT saying a
lack of action could result in a missed opportunity for federal funding.
 SNAP Employment and Training: Foot dragging by DSS has led to minimal outreach on this
program that provides a 50% federal reimbursement to state, municipal, public and private
agencies for SNAP E&T (food stamps). The Commission on Children provided technical
assistance without the help of DSS, but only 50% of towns are participating.

4. MUNICIPAL AID
Governor: Cut Municipal Aid $84 million
-- “Cuts in state aid to town = an increase in property taxes.” – CCM
-- Leaders in her own party rejected this proposal immediately
-- Even the task force of municipal leaders the Governor created unanimously voted against these
cuts

Democrats: Establish Blue Ribbon Commission on Real Municipal Relief

 Rep. Brendan Sharkey, Chair of P&D
 Representatives who are former mayors
 Representatives from municipalities, RESCs, RPOs/COGs, BOEs, municipal unions
 Create method to evaluate what municipal functions could be streamlined and done through
regional cooperation: purchasing, payroll services, 911 centers, student transportation.
 Restructure municipal grants such as ECS and create smaller grants to be paid out to RESCs
or RPOs for municipal functions or back office responsibilities.
 Diversify revenue streams for municipalities that work cooperatively.
 Regionalize a portion of the hotel occupancy tax
  Change the structure of the PILOT program

Democrats: Propose Municipal Mandate Relief (proposed by municipal officials):

– Keep extension on municipal real estate conveyance tax, allow for it to be paid on
foreclosed properties
– Establish a minimum residual depreciation value for the personal property of wireless
telecom companies
– Local option extension of school day and shortening of school year
– Allow municipalities to post public notices on the internet
– Look at Municipal Employment Retirement Fund options linked with State
– Exempt municipalities from health insurance premium tax (about an $8M revenue
reduction for State)
– Is it time to look at pooling?