Governor M. Jodi Rell has signed the budget.
The new budget agreement closes a $700 million deficit and reduces the level of borrowing without raising taxes or cutting state aid grants to cities and towns, Rell said.
It cuts spending by state agencies by $163.4 million and lowers interest expenses by more than 50 percent, or $133.5 million over eight years versus $300.6 million over 10 years.
“This budget is not perfect – I would have preferred to see more cutting in state spending and greater reductions in the overall size and scope of state government. Yet this agreement closes major deficits and does so without raising taxes or transferring the burden to property taxpayers. Along with reducing our borrowing, these were my bedrock goals as we developed this plan,” Rell said.
The budget replaces $1.3 billion in “securitization,” with a plan to borrow $989 million through Economic Recovery Revenue Bonds.
One impact the budget has on residents is a drop in the Competitive Transition Assessment, which appears on monthly electric bills. It was scheduled to expire in December for Connecticut Light & Power customers and in December 2013 for United Illuminating customers. For average charge is about $7.50 a month. Under the plan, the CTA charge will now drop to about $2.50 whenever it had previously been scheduled to expire.
The plan also uses a portion of the Energy Conservation & Load Management Fund charge that also appears on utility bills.
Rell said that using these sources rather than money from the General Fund to repay bonds, avoids a structural hole of more than $216 million in the annual budget.