Gov. Rell wants to spend Danbury's fund balance?!?

It seems like the governor's budget chief wants to empty out Danbury's financial reserves in order to take care of the state's crisis.

State government has emptied its savings to reduce the budget deficit, and Gov. M. Jodi Rell's budget chief said this week it's time for cities and towns to do the same.

But municipal officials said their budget reserves already have been reduced to compensate for shrinking state aid. More importantly, they added, communities can't exhaust their reserves the way the state has without risking a dramatic increase in financing costs.

"Should the state borrow money so municipalities can preserve their fund balances?" Office of Policy and Management Secretary Robert L. Genuario asked Wednesday as he testified before the legislature's Appropriations Committee.

Connecticut amassed a record $1.38 billion in its emergency reserve, commonly known as the "Rainy Day Fund," between 2004 and 2008. That savings, equal to roughly 8 percent of state government's annual operating costs, now is gone. Rell and the legislature agreed last fall to use the entire reserve to shore up declining tax revenues both this fiscal year and next.

Rell's latest plan to close out this year's $518.4 million deficit relies on moving into the current budget nearly $220 million in Rainy Day Funds originally assigned to 2010-11. To help offset that switch, the governor has suggested reducing town grants by $45 million next fiscal year.

Genuario said the administration believes several non-education programs could be cut, adding that towns could cover the lost by looking within their savings accounts.

For those who are not keeping score, so far, here's the update.

As Mayor Boughton parades across the state selling his gubernatorial stump speech to any Republican Town Committee that will hear him, and with weeks until the the city council tackles the 2010-2011 budget proposal:

• Gov Rell has NOT propose an extension to the higher real estate conveyance tax rates cities are desperately replying on while they draft their budgets (NOTE: if not extended, the rates will go back to their original levels after June 30).


• Lawmakers are doing their best to make border tolls in Connecticut a reality.


and now...


• Gov. Rowland-Rell's is proposing to shift the state's deficit burden to cites and town.

Mark my words, Danbury's 2010-2011 budget will be one of the most difficult to date...and these outrageous proposals from the State Capitol are going to have a detrimental impact on everyone.