Connecticut Gov. Proposes Economic Recovery Initiatives, Cuts TBED

Gov. Jodi Rell last week unveiled her FY11 midterm budget adjustments, eliminating or reducing funding for several TBED initiatives in the second year of the biennium. At the same time, the governor proposed an economic recovery package that includes a lending program for small businesses, a student loan forgiveness program to retain green collar workers, and a sales tax exemption for green energy industries.

The governor's proposal includes the following eliminations and reductions in the second year of the biennium within the Department of Economic and Community Development (DCED):

• Eliminate FY11 funding for CCAT Manufacturing Supply Chain ($400,000).
• Eliminate FY11 funding for Hydrogen/Fuel Cell Economy ($237,500).
• Eliminate FY11 funding for Entrepreneurial Centers ($135,375).
• Eliminate FY11 funding for CCAT Energy Application Research ($100,000).
• Reduce FY11 funding for CONNSTEP ($40,000 decrease).

In total, the adjustments decrease funding for DECD by $4.1 million in the coming year.

Within the Office of Workforce Competitiveness, the governor recommends a $60,000 reduction for the Nanotechnology Study and a $37,500 reduction for SBIR matching grants.

The governor's budget proposal also outlines an economic recovery package that targets renewable and clean energy industries for job growth and provides access to capital for businesses.

To open access to credit for small businesses, the governor is proposing a $500 million public-private loan pool, which would be established using $100 million in bond funds. Two funds would be created: one for businesses with 250 or fewer employees and the other for businesses with 100 or fewer employees.

The $6 million student loan forgiveness program proposed by Gov. Rell would apply to recent college graduates in renewable energy, manufacturing, R&D, life sciences, and information technology fields who spend at least five years working in the state. Individuals receiving a Bachelor's degree would be eligible for up to $10,000 and those earning an Associate's degree could receive up to $5,000. The program would be operated by the Department of Higher Education.

Finally, to encourage research and production of equipment used in the renewable energy and clean technology industries, the governor proposed a sales tax exemption that would apply specifically to technologies to produce, improve or develop solar power, passive or active solar water or space heating systems, geothermal systems, and wind power.

Gov. Rell issued five rounds of rescissions and proposed four separate deficit mitigation packages during FY09. The General Assembly adopted four mitigation packages totaling $481.7 million, leaving a FY09 deficit in the General Fund of $948 million. The governor's proposed modifications to the adopted 2009-11 biennial budget would result in an all funds budget for FY11 of $18.9 billion, a decrease of $27.7 million.

The FY11 Midterm Budget Adjustments are available at: http://www.ct.gov/opm/lib/opm/budget/2010_2011_midterm_budget/budgetdocuments/201011govmidtermadjustmentsentirebook.pdf