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Governor Vetoes Bill To Delay Cut In Estate Tax

JOSH KOVNER

December 29, 2009

HARTFORD - After months of finger-pointing, legislative Democrats and Gov. M. Jodi Rell remain miles apart on how to solve a budget deficit projected at between $337 million and $550 million.

One certainty after Rell on Monday vetoed a bill to postpone a cut in the estate tax and a countercharge from the Democrats that she was protecting multimillionaires is that this year's protracted budget battle will spill into 2010.

The Democrats lack the votes to override Rell's vetoes Monday of the House's estate tax measure and of the Senate's deficit-reduction plan for the fiscal year ending June 30, 2010.

Sen. Donald Williams, D-Brooklyn, president pro tem of the Senate, said that Democratic leaders would huddle over their options and respond to Rell's vetoes in some form when the legislative session begins in about a month.

The estate tax bill would have postponed for two years $76 million in tax cuts. The cuts will benefit heirs of estates worth at least $2 million but not more than $3.5 million.

Rell, in a written statement, said that postponing the cut was another way of trying to balance the budget with taxes something she couldn't abide.

Supporters of the tax reduction say that Connecticut's levy on estates is anti-business and discourages wealthy investors from settling here.

But Williams said Rell was choosing to "protect multimillionaires instead of dealing with the reality that she is overspending the biennial budget. The vetoes were a smoke screen to cover her failure to stay within the bottom line."

Rell and other Republicans have been critical of the 2009-10 budget, saying that the Democrats balanced the spending plan based on projected cuts to government services that were unrealistic. Rell has also pointed to concessions that she obtained from state employee unions as an example of how she is reducing spending.

Williams said that although the deficit is projected at $337 million or more, $116 million of that is a revenue shortfall, and the rest, he contended, is the consequence of the governor's failing to make the cuts to the state bureaucracy that she said she would make.

Williams said that the legislature, before Rell's vetoes Monday, had closed the $116 million revenue shortfall, and he called on the governor to make an additional $200 million in cuts.

Rell had said after the legislature met in special session Dec. 21 that she was "profoundly disappointed" that the lawmakers didn't take further steps to close the deficit. She added Monday that the Democrats had refused "to confront the reality of the state's financial crisis."

"The Democrats managed to trim state spending by a feeble $12.4 million," Rell said in her statement Monday. "It is a repeat of the same pattern we have seen time and again this year: Regrettably, it is an outright refusal to admit that state spending has far exceeded the ability of state taxpayers any state taxpayers to pay for it."

Rell said that she was submitting legislation that would "incrementally" extend the governor's authority to deal with budget deficits on her own, without needing legislative approval. The change, she said, would "help ensure that the failure of the usual system for dealing with budget shortfalls does not wind up creating a lingering crisis or worse being solved on the backs of taxpayers with tax increases or ill-considered borrowing."

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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