With Connecticut facing a budget deficit this fiscal year and with more trouble looming in the next few years, state lawmakers will return to the Capitol next week for a special session called by Gov. Rell to explore solutions to fix this year’s gap.

“To do nothing … is not a reasonable alternative,” said Gov. Rell’s budget director, Robert Genuario at an Appropriations Committee hearing this week on the budget gap. “We cannot put off solving these problems.”

Unfortunately, at press time the rumors at the Capitol were that in fact, despite the special session and the severity of the problem, majority Democratic lawmakers would put off working on the governor’s recommendations or any others.

Based on the budget adopted by the legislature in October, Connecticut will end this fiscal year with a deficit of $466.5 million. However, part of that budget was a half-percentage reduction in the sales tax that would only go into effect with certain state revenue performance.

But state revenues have “plummeted,” said Genuario, negating the sales tax cut. In fact, gaps have occurred in most areas of state tax revenue, and the drop in sales tax revenue “is unprecedented.”

The governor’s mitigation plan is based on a deficit of $337 million, which accounts for the sales tax cut not taking place. Her plan includes $200 million in spending rescissions and reductions; $52 million in transfers of funds to the state’s General Fund and $84 million in reductions to municipal aid.

Genuario added that the governor is willing to work with the legislature on alternatives to her plan. Ideas, however, must be “real, concrete and measurable” and able to be implemented this year.

Meanwhile, Republican lawmakers last week offered their own deficit mitigation plan, saying the state has to cut spending to deal with the projected deficit and avoid pushing more of the problem onto cities and towns. The Republican’s plan includes ways to reduce state spending by $466 million and calls for the sales tax rate to be reduced from 6% to 5.5% to help consumers and create more economic activity. It also cuts most state budget accounts by 6.5% to achieve the necessary savings.

For more information about the state budget, contact CBIA’s Bonnie Stewart at 860-244-1925 or bonnie.stewart@cbia.com.