Thursday, June 28, 2007

State budget has more for education, medical insurance for poor

HARTFORD -- The General Assembly is expected tonight and over the weekend to approve overwhelmingly a new biennial budget that orders huge spending increases for education and health care while avoiding major tax hikes.

The plan also includes modest increases both for nursing homes and for private, nonprofit social service agencies, two components that received little new money under earlier proposals.
The budget won't include any income tax changes. Both the $500 tax break for middle-income families and the tax rate hike for households earning above $272,000 -- both Democratic proposals -- have been scrapped.

"When folks take a look back at this," Senate President Pro Tem Donald E. Williams Jr., D-Brooklyn, said late Thursday, "this will truly be viewed as the historic budget year it was."

House Minority Leader Lawrence F. Cafero, R-Norwalk, who led the push this spring to reject major tax hikes proposed by both Democrats and Republican Gov. M. Jodi Rell, predicted "overwhelming" Republican support for the final package.

"It's a compromise document," Cafero said, adding that while Republican lawmakers are wary of the spending growth, they are pleased to see major investments in health care and education.

The House of Representatives was scheduled to convene at 6 p.m. and begin the budget approval process by adopting the main appropriations and revenue bill.

Besides that measure, lawmakers also need to approve three technical policy bills to implement new and revised programs within the budget, as well as three or four bonding bills that will outline state government's capital program for the next two fiscal years.

House and Senate leaders say they hope to have all measures approved by both chambers by the end of Saturday.

Full details on the budget's bottom line were not available early today. Legislative leaders said general fund spending -- which covers the bulk, but not all, of government operations -- should grow by just under 9 percent in the coming fiscal year.

State government is operating this year with a $16.1 billion total budget, with a general fund of more than $14.8 billion.

Rell, who initially called for $660 million in new taxes and then reversed herself in May after state revenue forecasts improved, will score her biggest victory in terms of education.

The governor, who asked for more than $600 million in additional Education Cost Sharing grants to towns over the coming two years, will see a healthy share of that request in the final budget.

ECS grants will top this year's $1.6 billion level by $181 million in 2007-08, and will reach $261 million over current spending by 2008-09. That $442 million in additional ECS outlays is the largest increase in any budget since state government launched a major education grant system in response to the 1979 Connecticut Supreme Court's decision in the Horton vs. Meskill lawsuit.

Democrats, who control two-thirds of both the House and Senate, campaigned largely on a plan to bolster the state's faltering health care safety net.

And the budget reflects that priority, pouring more than $215 million total over the next two years into boosting state reimbursements to doctors, dentists, hospitals, community health clinics, and other care providers who treat poor patients on state assistance.

The budget also:

-- Expands the Husky health insurance program's eligibility rules for pregnant women.

-- Allocates $39 million to give nursing homes a 2.9 percent funding increase next fiscal year. Both Rell and the Democrat-controlled Appropriations Committee hadn't recommended any hike in their plans.

-- Provides for a 3 percent increase for private, nonprofit groups, with whom the state contracts to provide the bulk of social services in Connecticut. It was unclear late Thursday whether that increase would begin with the start of the fiscal year on July 1, or on Oct. 1 -- a date when several past nonprofit rate hikes had taken effect.

Rep. Denise W. Merrill, D-Mansfield, said she and many other Democrats are disappointed that Rell wouldn't allow an income-tax hike on wealthier households so that middle-income families could receive a tax break. But she added that the health care and education increases will make a huge difference.

"We are talking about large increases in very important programs," Merrill said, adding many of the health care rates had been neglected for a decade.

Rep. Henry Genga, D-East Hartford, said "I'm disappointed that the property tax relief we wanted isn't there," referring to a Democratic proposal to boost the property tax credit within the income tax system from $500 to $1,000. "I think the Republicans did what they wanted to do: protect the rich," he added.
by:Keith Phaneuf, Journal Inquirer

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