May 7, 2010
DEMOCRATS, GOVERNOR REACH BUDGET AGREEMENT ON TIME
No Tax Increase, No Cut In Town Aid, Lower Electricity Bills
State Representatives Henry Genga (D-East Hartford), Jason Rojas (D-East Hartford, Glastonbury, Manchester) and Timothy Larson (D-East Hartford, South Windsor) along with their fellow legislative Democrats have announced a bipartisan agreement with Governor M. Jodi Rell that balances the state budget through fiscal year 2011 with no tax increases, no cuts in municipal aid and a decrease for most residents' electric bills by an average of $60 a year.
The plan, which was approved by the General Assembly prior to the constitutional adjournment date of May 5, includes $170 million in spending cuts across a host of state agencies and a reduction of $300 million from a previous borrowing plan. There is also hundreds of millions in savings from a shorter term and lower interest rate on the issuance of $956 million in Economic Recovery Bonds (ERBs).
"In the face of this economic crisis, the Democrats and the Governor came together on behalf of all residents to balance our state budget with a combination of responsible cuts and the preservation of important services," Rep. Genga said.
"No tax increases, no cuts to town aid and a break on electric bills are a winning equation for state and local taxpayers," Rep. Rojas said. "That being said, I believe that the amount of borrowing that was required to balance the budget is less than desirable but that concern is tempered by the fact that the borrowing will be done as late in the year as possible with the goal that an improving economy will provide for a stabilization of revenues, which will allow us to decrease the level of borrowing," he said.
"What we did with the Economic Recovery Bonds was to help reduce the budget deficit while protecting residents from utility companies who didn't want to pass on new found savings to their customers," Rep. Larson said. "In addition we created a new Green Loan Fund that reinforces our commitment to creating green jobs and energy efficiency."
The ERBs have an eight year term at a low interest rate of 3% and will be paid off using a small portion (one third) of two current charges on electric bills. As part of the budget, customers will see one of the charges reduced by over 60%. The net result for most electric customers will be a savings of about $5 per month. As the economy continues to recover and revenues grow, the ERBs can be paid off earlier.
In addition, as an alternative to entering a much more expensive nursing home setting, seniors will see up to a $300 per month cost reduction for certain home care services that will saves taxpayers millions of dollars over the long term. AARP has endorsed the home care program.