Lawmakers returned to the state Capitol on Monday to tackle a growing state budget deficit estimated at more than $300 million for the current fiscal year.
After hours of closed door meetings, the House of Representatives took up the plan in a special session in the late afternoon. The Senate was to vote on a second bill that included reforms to help struggling municipalities.
But early indications were that whatever they passed would not cover all the red ink for fiscal year 2009, which ends on June 30.
The projected $302 million deficit has grown since Gov. M. Jodi Rell first proposed her mitigation plan last month. Various lawmakers estimate there would still be a gap ranging from $50 million to $250 million after they passed Rell's plan. Like many other states, Connecticut's revenues have dramatically slowed in recent months.
"I'm hoping we'll come together after Thanksgiving," Senate Minority Leader John McKinney, R-Fairfield, said. "We have to do something."
Senate President Donald E. Williams Jr., D-Brooklyn, said he expects lawmakers will take further steps to reduce the 2008-09 fiscal year deficit after they return to the Capitol in January for the regular legislative session.
"I anticipate that this is not the end. This is the beginning," he said. "This is the first step."
When the new session convenes, lawmakers must deal with a projected $6 billion deficit over the next two fiscal years.
"This is almost easy, and I don't say that lightly," McKinney said of Monday's budget-cutting effort.
Williams said the Democratic majority supports 95 percent of the Republican governor's plan to reduce the 2008-09 deficit by about $300 million. It includes budget cuts and delaying spending on several programs. There's also a proposed program to encourage people to pay their delinquent taxes, estimated to generate $40 million.
But Williams said there's not enough support for Rell's proposal to take control of an estimated $28 million in unclaimed bottle deposits that currently go to beer and soda distributors. Some fear that could lead to job cuts in the beverage industry. The proposal has been beaten back by the distributors' lobbyists for many years.
Williams, who backs Rell's idea, predicted the issue will return in January, along with proposals for concessions from state employee unions.
"We have never seen a budget crisis of this magnitude," he said. "It's going to require a completely different approach. Everyone is going to have to bring something to the table."
Supporters of the bottle deposits idea said it's only fair for the state to recoup the unclaimed nickel deposits, just like other unclaimed assets such as old life insurance policies and savings accounts.
"We are desperate for the cash and there's no reason why we shouldn't have done it years and years ago," said Betty McLaughlin, executive director of the Container Recycling Institute.
Struggling bottle redemption centers are hoping some of that money can be used to increase their handling fees. Connecticut last increased the handling fee that redemption centers receive for an empty bottle of beer from 1 cent, to 1.5 cents in 1986. The 2-cent fee for a soda can or bottle has been in place since 1978.
John Ancheff, owner of DJ's Redemption Center in Waterbury, said he's not sure how long he can remain in business.
"At the current rate, I don't know," he said. "It's month to month"
Rell's proposal to change state retiree pharmacy benefits also faces some opposition. It is supposed to save $14.5 million but needs the consent of the unions and the legislature. Williams said Rell can go ahead and negotiate with the unions without legislative approval.
If lawmakers don't make enough cuts or come up with additional revenue before the fiscal year ends on June 30, the remaining deficit will automatically be covered by part of the state's $1.4 billion rainy day fund, said Rep. Cameron Staples, D-New Haven, co-chairman of the tax-writing committee.
"Obviously we want to do as much as we can because the rainy day fund is needed next year," he said.
