“This is a direct affront to the people of Connecticut,” Hetherington said. “Teachers are facing layoffs, our unemployment compensation fund is insolvent, federal funds are uncertain, and Connecticut is looking at a $3 billion-plus deficit next year. Yet we are giving $6 million more of our money to politicians so they can keep your mail box full and provide you with robocalls at dinner time.”

The additional money is contained in Senate Bill 551 that was produced in response to a federal appeals court decision holding certain parts of Connecticut’s Citizen’s Election Program to be unconstitutional. In the debate, Representative Hetherington also objected to the fact that the bill was brought out without a public hearing.

“There was plenty of time for a committee hearing,” he said. “That would have allowed taxpayers to have had their say.” Hetherington is ranking member of the Government Administration and Elections Committee that would have cognizance over the measure.

During consideration of Senate Bill 551, the majority rejected an amendment that would have denied grants to candidates who actually have no opponent.

State Rep. John Hetherington participates in the Norwalk River clean-up in Merwin Meadows Park in Wilton with the Mianus Chapter of Trout Unlimited in celebration of the 40th Anniversary of Earth Day. Click to watch video.

Erases $736 Million 2011 Deficit – No Taxes, Smaller Gov’t -$74 Million to Create Jobs 

HARTFORD – Today being Tax Day, April 15^th, the last day Connecticut residents have to mail in their tax bills, State Rep. John Hetherington (New Canaan and Wilton) along with the rest of the House Republican caucus unveiled their 2011 budget that erases the $736 million deficit for 2011 without raising taxes by consolidating government agencies and shrinking the public workforce, and commits $74 million to stimulate job growth. 

The balanced plan preserves municipal and school aid, and sets aside $74.5 million to stimulate job growth. Companies that hire the unemployed can earn $17.5 million in tax credits. In addition, the plan establishes a $25 million small business revolving loan fund and eliminates the Business Entity Tax. 

Rep. Hetherington said, “We can’t ignore fiscal year 2011 that begins in two months, and we need a plan that cuts expenses and builds revenue by helping more people earn a paycheck rather than raising taxes on our overburdened citizens.” 

The Common Sense plan offers a flexible menu of choices to create savings from concessions that have all been validated by the non-partisan Office of Fiscal Analysis. 

The hallmarks of the savings:

• $58 million in line item cuts to 2009 levels;
• $64 million in early retirement for state workers;
• $10 million in state agency consolidations;
• $6.4 million to shed state office leases; 
• $20 million in privatization of state functions;
• $150 million in state worker concessions, including wage freezes, furlough days and health care;
• $3.8 million in legislative pay cuts, elimination of franked mail and travel.

 The budget also makes significant investments in job creation and retirement security:

• $200 million will be paid into the state employee pensions;
• The Business Entity Tax is eliminated to save companies $32 million;
• A Small Business Revolving Loan Fund of $25 million is created;

Tax credits of up to $17.5 million will be available to companies that hire off unemployment rolls.

State Reprersentative John Hetherington (R-125) hailed the decision by the state to hold a hearing in New Canaan on the response by CL&P to the storm on March 13 and 14.

“I am very pleased,” he said, “That residents of New Canaan, Wilton and surrounding towns will have a chance to relate their experience, state their concerns and hopefully get answers to their questions.”

Hetherington had joined Governor Rell in asking for an investigation and asked that public hearings be he in communities in Fairfield County. The New Canaan hearing will be held in Town Hall at 6:30 on April 7.

SB 225, An Act Concerning the Duties of a Mortgagee in a Foreclosure Action on Residential Real Property, facilitates communication during foreclosure proceedings by requiring that a bank employee be designated to work directly with a homeowner in mediation to end the proceedings quickly and efficiently.

“This legislation encourages banks to name a specific person in their organization to deal with each homeowner who is in danger of foreclosure,” said Rep. John Hetherington, a member of the legislature’s Judiciary Committee. “It is hard enough to reach a real person at one of these large banks, and nearly impossible for a homeowner to reach the same person again. This defeats the mediation process and needs to change.”

NEW CANAAN- State Representative John Hetherington (R-125) has joined Governor Jodi Rell in asking the CT Department of Public Utility Control and the Department of Emergency Management and Homeland Security to examine the actions of CL&P in responding to the power outages resulting from the storm that struck southwest Connecticut over the weekend of March 13 and 14. He asked specifically that hearings be held locally to accommodate citizens in the towns that were most severely impacted.

“We pay the highest electric utility rates in the U.S. and what our people experienced is just unacceptable at any price,” Hetherington said. “We need real answers delivered in person.”

Acknowledging that even a vigorous investigation is small satisfaction to residents who went without lights, water and refrigeration for days, the legislator emphasized that there has to be accountability and credible assurance that we won’t see a repeat performance. While critical of CL&P, Representative Hetherington praised local officials “for literally protecting lives and avoiding a far worse situation.”

Read the Common Sense Commitment to Connecticut.

There is more. As scheduled under the Bush tax cuts, our national death levy was allowed to die January 1, 2010. As a result, right now many more Connecticut estates will pay no state tax and none will pay a federal estate tax. But before any heirs get too excited, several cautions are in order. There is nothing to prevent Congress or the Connecticut Legislature from passing new estate tax legislation retroactive to January 1, 2010. In fact, Congress is generally expected to do just that as soon as a health care bill is completed.
Incidentally, it should be noted that if nothing is done by Congress the federal estate tax will come roaring back in 2011 at pre-cut levels. Also it is highly recommended that people review their estate plan with a qualified professional. Some elements, including will provisions dealing with a credit shelter trust, could have unanticipated consequences in the absence of an estate tax.  So, while the estate tax stars seem uncommonly well aligned in 2010, it is probably still better to defy the tax  collector altogether by not dying.

Other legislation that became effective January 1 carries good and not so good news. In a particularly mean stroke, the real estate conveyance tax now applies to the transfer of foreclosed properties as well as those conveyed in a voluntary sale. The scheduled reduction in the state sales tax from 6% to 5.5% did not happen because the needed stabilization of revenue was not met. The minimum wage in Connecticut went from $8 to $8.25, which may be good news if you have a job or belong to a union with a contract sparking a wage increase when there is an increase in the minimum wage. If you run a small business or like to offer jobs to beginners, then not so much. Finally, a new law that I was proud to co-sponsor requires health insurance coverage of autism spectrum disorders for children under the age of 14.

So now we must look ahead. In this even year, the regular session of the Legislature begins February 3. It’s our job to do our best to make 2010 a happy new year for Connecticut.

In this season of Santa, the news from Hartford is as welcome as coal in the stocking. But, nevertheless, here is an overview of Connecticut’s fiscal crisis, down to the Governor’s recent deficit mitigation plan.

By way of recap, last August we adopted a 2010-2011 biennial budget totaling something over $38 billion. This budget spends modestly more than in the previous biennium. To balance the budget required a net tax increase of $950 million, fee increases totaling $206 million, new borrowing of $2.5 billion, all of the rainy day fund, and a variety of one-time revenue measures. About $1billion of the new borrowing went to satisfy the ghost of deficits past, in particular the lingering shortfall from FY 2009.

But the fix didn’t hold. Revenues continued to fall.  As of the middle of November, the Office of Fiscal Analysis projected a new general fund deficit of $386 million for this fiscal year, 2010. The Office of Policy and Management now has projected a $337 million gap. State Comptroller Nancy Wyman had an even gloomier message, projecting a $624 million deficit for the current year. The lower numbers assume that the sales tax will not drop from 6 percent to 5.5 percent on January 1. That reduction depended on projected revenue from the tax not falling more than 1 percent. It has and the sales tax will stay the same.

The problem overall is two-fold. We continue to spend more than we can afford. Since a crisis nearly 20 years ago produced the income tax, state spending has doubled while the population has remained essentially stable. Second, the current recession on top the long-term absence of job growth has cut tax revenues. For example, the Comptroller’s office reported that estimated quarterly payments of the state income tax were off 29 percent in September. Since the income tax makes up over 40 percent of our total revenue, the significance is obvious. The sales tax, our second biggest revenue source at 21 percent, also is yielding much less as people have had to cut their spending.

Perhaps more troubling, the future is not looking good either. Even though we can expect to return at some point to an annual revenue growth averaging around 6 percent, official estimates place the budget deficit in the billions for fiscal years 2012, 2013 and 2014. During
2009 Connecticut is believed to have lost 100,000 jobs and more than half that many small businesses have failed. It may take 5-10 years just to get back to where we were when the storm hit. Further, from what we already can expect, the health care bill that emerges from Congress likely will dump billions on the states in terms of increased Medicaid costs. With Medicaid among Connecticut’s fastest growing costs and now consuming over 20 percent of the entire budget, the consequences to our state may be devastating.

Noting the long-term view, the rating agencies took another look at Connecticut debt. While not downgrading our bond rating now, the outlook was dropped to negative, citing excessive borrowing, over-reliance on taxing a limited number of wealthy taxpayers, and use of one-time devices to balance the budget. Determined to kill the messenger, the Connecticut Attorney General has announced that he is suing the rating agencies.

What to do. As required by law, Governor Rell has proposed a deficit mitigation plan to erase what she concludes is a current deficit of $470 million. Some reductions can be accomplished by executive action.
The rest must pass the Legislature. The cuts are tough and without doubt will cause pain. They will be particularly painful because we have recklessly allowed expectations to build beyond our ability to deliver.

The numbers are not Democrat or Republican numbers. They are just numbers. A solution is the responsibility of both parties, but especially Democrats because they control two-thirds of the Legislature. There are options.  For example, aggressive consolidation of agencies is possible along with use of volunteers for advocacy commissions. In any case, we need to return to session without delay and deal with reality. This may be the season for Santa, but at least in the world of public finance, there is no Santa Claus.

NEW CANAAN- Citing the impact on towns and people in Southern Connecticut, State Representative John Hetherington (R-125th), sharply criticized the U.S. Attorney General’s selection of New York City as place of trial for Khalid Sheikh Mohammed and others accused of plotting the 9-11 attacks.
 
“This will require towns like New Canaan and Wilton to bear the stress of increased preparedness to deal with another possible attack in our backyard,” Hetherington said. “It is not just New York City that will be affected.” Also, he continued, “I am disappointed at the insensitivity of making those in our towns who lost family and friends at the World Trade Center relive the experience.”
 
Representative Hetherington concluded by commenting “The decision to hold the trials in New York is not even logical. If the point is to show the world the fairness of the American justice system, the point fails. An ordinary defendant certainly would be entitled to a change of venue, not a trial in the very place where jurors are most likely to convict due to their terrible experiences on 9/11.