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State legislators make quick work of closing budget gap

By Johanna Somers

Publication: theday.com

Published December 19. 2012 10:00PM   Updated December 20. 2012 12:32AM
House, Senate find $252.3 million in reductions, mostly from Department of Social Services

State legislators reduced the budget deficit by $252.3 million late Wednesday in a special session using a combination of $221.5 million in spending modifications and $30.8 million in revenue adjustments.

The Senate voted 31-3 at 10:14 p.m. in favor of the deficit mitigation plan. Earlier Wednesday evening, the House of Representatives voted 140-3 to approve the plan.

These revisions, along with Gov. Dannel P. Malloy's $108.5 million in previous budget deficit reductions, helped close much of the $365 million budget deficit.

The Department of Social Services lost the most funding, $126 million. Social services included funding for medical emergency assistance, teen pregnancy prevention and Medicaid.

Hospitals across Connecticut were severely affected because the state reduced support for Medicaid and uninsured patients.

Hospitals lost $103 million in funding.

"As we see it, hospitals are 5 percent of state spending. As best we can tell, we are over 30 percent of all the cuts being proposed," said Stephen Frayne, senior vice president of health policy for the Connecticut Hospital Association. "On its face, it doesn't pass the fairness test."

Lawrence & Memorial Hospital is expecting to lose nearly $3 million in funding, hospital spokesman Michael O'Farrell said.

"If these cuts continue and the state keeps demanding that money be taken from hospitals long-term, the patients and the public are going to be the ones who are affected," he said.

Many legislators said they adjusted the budget carefully, keeping in mind the importance of protecting funding for youth.

"A real effort to ensure that the kinds of services that we have been talking about for kids, young adults and adult mental health services … (have) been preserved," state Rep. Betsy Ritter, D-Waterford, said.

Other departments that lost major funding are the Department of Correction, $9.2 million; the Department of Education, $8.4 million; and the Department of Transportation, $7.4 million.

The legislature also will reduce its debt service by $25 million. The state will need to reduce the amount it borrows or must refinance in order to decrease the amount it pays on principal and interest.

The legislature plans to raise revenue by limiting business tax credits and reducing tax fraud.

In a press release, the Connecticut Business & Industry Association said the tax credit reversal would undermine business confidence. Tax credits are proven tools for encouraging growth and creating jobs, according to the association.

State Rep. Lawrence Cafero, R-Norwalk, attributed the ability to come together and close the budget deficit to the new realities following the massacre in Newtown.

"This agreement is because of the spirit of Sandy Hook," Cafero said.

In a joint statement following the Senate vote, Malloy said: "The events of the last few days have made the differences we have in Hartford seem very small by comparison. It is my hope that we can keep this collaborative spirit going in the weeks and months ahead."

j.somers@theday.com

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