NFIB

Special session set for Monday; legislature to address growing budget deficit
At the request of Gov. Jodi Rell, both the state House and Senate are scheduled to convene in special session to address the state's mounting fiscal crisis. Starting at 10 a.m. Monday, the General Assembly will meet and is expected to approve Gov. Rell's $302 million deficit mitigation plan, which includes a series of spending cuts, a tax amnesty program and a seizure of unclaimed bottle deposit revenue by the state. That plan will attempt to address the current fiscal year's budget shortfall. However, the current year's budget deficit has recently climbed to $356 million, and the projections for the next two fiscal years, 2010 and 2011, which begin on July 1, 2010, look even worse. As a result of the national economic downturn and fluctuations on Wall Street, Connecticut's state budget (which is heavily dependent on income tax revenues, particularly from residents of Fairfield County) is now facing a $2.6 billion shortfall in fiscal year 2010 and almost a $3.3 billion shortfall in fiscal year 2011, based on current service and spending levels. In early February, Gov. Rell will unveil her two-year plan to close the nearly $6 billion gap that is projected for the next two fiscal years. The governor has stated recently that everything is on the table over the next two years -- including state employee layoffs and other alternatives that she wants to avoid, and she has said that she will do everything she can to avoid layoffs and tax increases.

Gov. Rell seeks your input; taxpayers urged to submit ideas
Gov. Rell's office recently announced the launch of Connecticut's Online Budget Forum, where the latest budget news and numbers will be posted. In addition, the governor is looking for Connecticut taxpayers to submit ideas on how to reduce state spending or add to government efficiency. The Online Budget Forum has already received hundreds of suggestions and ideas from taxpayers for saving money and making state government more efficient, ranging from bringing back tolls to allowing beer and wine to be sold on Sundays to banning all-night legislative sessions.

State launches clean technology fund
Despite being in the midst of a financial crisis, the state recently announced the creation of the Connecticut Clean Tech Fund aimed at making investments in seed- and early-stage companies focused on innovations that conserve energy and resources, protect the environment or eliminate harmful waste. Gov. Rell stated "The fund will help Connecticut entrepreneurs to develop cutting-edge solutions to address climate change and other global challenges. Their innovations in renewable energy, energy efficiency, environmental remediation and other vital clean tech areas will create jobs in clean energy and related areas." 

State unemployment numbers increase; unemployment compensation costs likely to rise
Jobless numbers have risen in Connecticut. According to the state Department of Labor's most recent report, the unemployment rate in Connecticut is now 6.5 percent, having risen from 6.1 percent at the end of September. Most labor economists except unemployment in Connecticut to continue to rise through at least the first half of 2009. At the same time, employers are expected to face rising unemployment compensation insurance costs. According to the DOL, the state's Unemployment Compensation Trust Fund is already paying out more in benefits this year than it is receiving. This year, the additional unemployment compensation tax that employers are paying to keep the trust fund in the black is 0.9 percent. Next year that solvency tax rate likely will jump -- possibly to as high as 1.4 percent. The increases will be reflected in employers' March statements from DOL and would be payable on April 1, 2009. 

Federal update
In Washington, D.C., this week, much of the focus has been surrounding the proposed auto bailout by Congress. As NFIB President and CEO Todd Stottlemyer said in a recent statement opposing the bailout: "There are many small businesses across the country struggling to make payroll and pay the bills. They aren't asking for a bailout, and neither should Detroit's automakers."