The State Budget   These are the prepared remarks made by Gov. John G.Rowland, on the proposed two-year state budget, before the General Assembly on Feb. 13, 1997   Mr. Speaker, Madame President, reverend clergy, friends and guests. I won't keep you long, because my message is simple. I'm not here with a fistful of dollars and a long list of promises. That's the old way. The people expect more from us. This is a no-frills budget. A month ago I came before you and spoke of the Connecticut comeback. Perhaps the most important part of my message to you then, was the call for us to stay the course. And today, Connecticut is watching to see if we have the vision to move forward and the courage to resist the temptation of old habits - just long enough - to give the people another two years free of new government spending and taxes. The budget I present to you today requires no more spending than this year, cuts the income tax, cuts the gas tax, and raises expectations, by requiring government to do more, with less of the people's money. Connecticut is making a comeback but our victory will not be complete unless this Legislature makes the right decisions in the weeks ahead. The state's economy is moving in the right direction, but that can all change, if we view positive economic indicators as a green light for state government to resume its high spending. Two years ago we responded to the people correctly by halting the growth of government and phasing down taxes. If we turn back now the progress we've made will be lost. The goal of my administration is to return to the fundamentals, by identifying government's basic responsibilities and directing our limited resources to meet those responsibilities. Helping those who can't help themselves. Protecting and educating our children. Caring for the elderly. Safeguarding public health. Securing public safety. Investing in the future and creating jobs. Every dollar the government spends on programs and services unrelated to these fundamental responsibilities, is another dollar taken away from the families of Connecticut. We have seen the results of reducing government spending and lifting the tax burden on the people of Connecticut. Unemployment is down. Population is up. The elderly are choosing to stay in Connecticut when they retire. New businesses are opening across the state and others are expanding. The message is clear; when we make the right decisions here in Hartford, the state sells itself. State government has been a partner in the Connecticut comeback, but the true test of any partnership comes not at the beginning of a journey, but at the crucial points along the way where if one wavers, the other begins to lose faith. I will not waver. I will not jeopardize Connecticut's economic recovery by returning to the free spending, high tax ways of the past. I have made my choice. We have promised the people another responsible budget and another round of tax cuts. That's what they're expecting and that's what we will deliver. As I promised in January, the $10.16 billion budget I present to you today holds the line on spending. Delivering a balanced budget with a tax cut required lots of difficult decisions and tough choices, but those who need assistance from their government the most, were protected from the deepest cuts. In Connecticut we will always take care of those who need our help. We will always care for the elderly. We will always protect our children and provide for their education. We will always care for the sick and assist the poor. No one is proposing anything less. In the past, when politicians talked about sacrificing for the greater good, it was the people who were asked to sacrifice more of their hard earned money to pay for some new program. Under my administration, it's the government, and the special interests, that are being asked to sacrifice, so the people can keep more of their money and make their own decisions about how to spend it. Our responsibilities are defined in part by the times we live in. This legislature, and I as Governor, have a constitutional obligation to meet the challenge presented to us by our state Supreme Court in the Sheff vs. O'Neill school desegregation case. Thanks to the work of the Educational Improvement Panel we have already made a good start. I want to thank Education Commissioner Ted Sergi, and the members of the panel, who volunteered their time, to address one of the most complicated issues we have ever faced as a state. The Educational Improvement Panel began the work of developing solutions to the racial isolation that exists in the Hartford school district. The panel also used the Sheff decision as an opportunity to explore potential improvements in our education system statewide. I agree completely with one of the major conclusions reached by the Sheff panel: The improvement of our urban school systems is tied as much to the rebuilding of our cities, and the elimination of poverty, as it is to education reform. Poverty is still the gravity that holds people down in our big cities, denying them success and opportunity. This two-year budget reduces and shifts spending in a variety of areas to allow us to make education reform a top priority, while keeping our commitment to urban renewal in all our core cities. This budget allocates $37 million in new spending to fund many of the programs and initiatives recommended by the Educational Improvement Panel and increases state aid for new school construction by $45 million. Returning to the fundamentals, I have allocated $10 million for new early childhood education programs, in addition to the Kids Come First program, developed by Commissioner Joyce Thomas and the Department of Social Services. Over the next two years we will spend an additional $4 million on Head Start, and another $4 million on Family Resource Centers. In an effort to directly address racial isolation, in city schools, this budget adds nearly $5.4 million over the next two years to enhance Project Concern in Hartford, New Haven and Bridgeport. Additional spending will be budgeted to promote interdistrict cooperation, public school choice, charter and magnet schools, and minority teacher recruitment. The classrooms of today must prepare students for the workplace of tomorrow. The workplace of the future will be dominated by computers and other high speed forms of communication. This budget provides $20 million in new state aid, over the next two years, to wire and upgrade computer capabilities in classrooms throughout Connecticut. Eight million dollars will be set aside specifically for schools in Hartford, Bridgeport, New Haven and Waterbury. The commitment these budget proposals represent to education reform are much more than a response to the Court's ruling, they are an investment in Connecticut's future. The increased funding and new programs create a new beginning, providing students and parents with greater choice and opportunity. Our goal is to provide equality of opportunity. Equal opportunity to learn. Equal opportunity to have the best books. Equal opportunity to have the best teachers and equal opportunity to have a safe learning environment. But money is not the most important part of the solution to any problem. Raising expectations for students, and encouraging the involvement of parents, teachers, community leaders and business leaders is crucial to the future success of education in Connecticut. Our commitment to the cities continues. This budget provides an additional $100 million, over the next two years, for urban economic development projects. Half that amount is earmarked for Bridgeport. We also plan to continue supporting urban police departments with special deployments of state troopers, when necessary, to fight crime. We will not allow criminals to prevent us from revitalizing our cities. Personal security and economic security must go hand in hand. I know we all agree cutting taxes for everyone is the most effective stimulus we can provide Connecticut's economy. In 1991, this state voluntarily surrendered one of the true competitive advantages we held over other northeastern states when we enacted the state income tax. The tax has become a silent partner in everyone's paycheck. It is my intention to continue to return reductions in spending through direct cuts in the income tax. The income tax cut proposed in this budget will mean a rate reduction of $820 a year for a typical family of four. Most taxpayers will see a decrease of one-third in their income taxes. The income tax cuts proposed in this budget will mean $365 million in new tax relief and when combined with cuts of $200 million, in my first two years in office, brings total income tax reductions to more than half a billion dollars. In addition, as promised, this budget exempts all Social Security income from the state income tax. The exemption provides an additional $15 million in tax relief to senior citizens. Everyone pays income tax. Everyone should benefit from an income tax cut. That means homeowners and renters. We didn't ask whether they owned property when we took their money from them, we shouldn't ask if they own property when we give it back. True property tax reform will only occur if we help cities and towns reduce their spending. We can help by continuing state aid and eliminating state mandates. This two year budget provides nearly $2 billion annually in direct aid to municipalities. During this session, I will encourage and support efforts by the Legislature to reform collective bargaining and binding arbitration rules imposed on our municipal governments. Taken together, these reforms could save towns as much as $100 million a year over the course of the next decade. Savings, I hope, local governments would pass on as property tax cuts. Let's pledge to our municipal governments, and the people of this state, that we will impose no new unfunded mandates. This approach to the income tax and property tax relief, maximizes the benefit of tax cuts, by requiring state and local government to budget responsibly and pay for tax cuts at their source. For the last 20 years, Connecticut motorists have endured a gradual increase in the gasoline tax. One penny at a time, we crept our way to the highest gas tax in the nation. The Special Transportation Fund budget before you today cuts the gas tax by five cents, effective July 1st. It is a significant cut that will be visible and have an immediate effect on prices at the pump. We have achieved this proposed cut honestly, by cutting costs in the transportation fund, moving other programs back into the General Fund where they belong, and addressing the disparity between the tax on gasoline and diesel fuel. Over the next two years this budget raises expectations for every state agency. Until now we have continually lowered expectations by habitually spending more money every year without requiringaccountability. As we return the core mission of our state government to meeting fundamental responsibilities, the size of the state workforce is also shrinking. My administration is currently in negotiation with the state employee unions over the terms of an early retirement plan for state workers. We hope this effort will minimize the need for layoffs and result in significant personnel reductions and cost savings. Despite the recommendations of a special commission, I have made no allowance in this budget for salary increases for this state's elected officials. We have made steady progress over the last two years in turning around Connecticut's economy. But I can not ask the people of Connecticut to fund a pay raise for the Governor, or the legislature, until we give the people the pay raise they deserve in the form of tax cuts and more responsive government. Connecticut is making a comeback. The people of this state are once again looking to the future with hope, not fear. Now is not the time for government to start spending more. Now is the time for us to be consistent with the policies of the last two years, that are helping to turn this state's economy around. Mr. Speaker, Mr. President, you now have my budget. I remain committed to working with you, but I remain steadfast in my commitment to holding the line on spending and cutting taxes. I look back with pride to what we have accomplished over the last two years, as I'm sure you do. I look forward to the next two years, because it is my hope that the hard decisions we make today will give our children and grandchildren the opportunity to know the Connecticut we knew growing up. A Connecticut where there's no doubt tomorrow will be a better day. Thank you and God bless.