State asks for big stimulus plan piece

Hartford (WTNH) - "Change" may be coming from Washington. But right now, the State of Connecticut is more interested in cash. With the state budget deficit reaching near record levels, the state's leaders are pleading for a bigger piece of the federal stimulus plan.

The state's top legislative leaders in Hartford are planning another meeting with the state's congressional delegation in Washington with hands out and hat in hand.

While President Obama spent his first full day in office, state leaders from around the country were scrambling in Washington to get as big a piece of the economic-stimulus-plan-pie as possible.

Reports from Washington indicate that Connecticut could be in line for as much as $800 million in aid for infrastructure and school projects. The state has already assembled a list of what's called 'shovel ready' projects that total three times that amount, $2.4 billion.

The State Department of Transportation has $700 million worth of projects ready to go. City and town water treatment projects total $185 million. The State University System has over $260 million in projects and local school projects already totaling $345 million.

The state claims that for every million spent on infrastructure, 50 jobs are directly or indirectly created. But this kind of grant will not help the state's current budget crisis.

"If you have federal dollars paying for those rather than the state, it means in the long term it will save the state money because it will reduce our debt service," Senator Martin Looney said. "But it wouldn't have a dramatic impact on the current budget problem as direct aid in Medicaid would."

The state spends close to $4 billion a year on Medicaid; it's one of those things that can't be cut. The feds reimburse about half of it.

"If they increase the Medicaid reimbursement for the State of Connecticut for health care we provide to seniors and low income adults, we could save hundreds, hundreds of millions of dollars," Speaker of the House Chris Donovan said.

Donovan thinks the Obama administration will increase the Medicaid reimbursement another $3-$500 million for this year, which could cut the state deficit in half.

But Governor Rell says it's no sure thing.

"There may be, and I use the term may be very loosely, some money for assistance this year in Medicaid which would be helpful in 2009," Governor Rell said. "But we can't count on it."

And another problem: whatever increase comes from Washington for Medicaid will likely be a one-shot deal. This means if it's all used right away, the state will be in the same busted-budget-boat next year and the next.