CROMWELL - With cities and towns concerned about possible cuts in state aid, Gov. Dannel P. Malloy said Wednesday that he favors a local hotel tax and increasing taxing options for cities and towns.

Malloy, the former mayor of Stamford for 14 years, says he wants to helps cities and towns as he prepares his proposed budget that will be unveiled February 16. The budget gap is currently projected at about $3.5 billion in the next fiscal year, and municipalities are hoping to receive at least as much money next year as they are receiving now. Overall, the municipalities receive about $2.8 billion in a wide variety of grants, including education.

"Every step of the way, I'm concentrating on how do I avoid hurting municipalities,'' Malloy told nearly 300 first selectmen and local town officials at a meeting of the Council of Small Towns in a hotel ballroom in Cromwell. "I do understand what's going on in local government.''

In the past, Malloy and other big-city mayors traveled to the state Capitol and asked the legislature to approve new methods that would allow them to raise revenue. That includes allowing them to keep a portion of the state's hotel tax or increase the local sales tax by 1 percentage point. The sales-tax increase, for example, could generate an additional $550 million to $600 million per year that could be distributed back to the towns. The legislature's finance committee voted last year to allow the state's 12 percent hotel tax to be increased to 15 percent, but the measure failed in the state Senate.

Now, after being elected in November, Malloy is in a position to help enact the policies that he pushed during his years as mayor.

"We do need to broaden the tax base,'' Malloy told the crowd Wednesday in his keynote address.

In 2009, then-Mayor Malloy came to the Legislative Office Building with New Haven Mayor John DeStefano to say that "we need a little sanity in this discussion'' so that cities would not continue to be overly reliant on property taxes. While the property tax provides the lion's share of revenue for most municipalities, they can also raise money - although in much smaller amounts - from the real estate conveyance tax, permits, and fees. 

"The hotel tax would be paid by out-of-state people. It's a no-brainer,'' Malloy said in 2009. "And the local-option sales tax has been on the table for a long time. But the state is saying, 'We're not going to give you what we promised, and, by the way, no new tools in your toolbox will be allowed.' ''

But state Rep. Craig A. Miner of Litchfield, the ranking House Republican on the budget-writing appropriations committee, said he believes that the money would never filter back to the towns that need it the most. Instead, he thinks the money would end up with a regional entity and not be funneled back, dollar-for-dollar, to the town that initially generated the revenue.

"I don't think the money is going to go to the municipality,'' Miner told the crowd during a panel discussion before Malloy arrived at the hotel. "It is not going to happen, ladies and gentlemen.''

Hartford Courant cartoonist Bob Englehart weighs in on Joe Lieberman, the former presidential candidate who will be leaving the U.S. Senate after 24 years, and Susan Bysiewicz, who is seeking his seat.

http://blogs.courant.com/bob_englehart/2011/01/january-20-2011.html

U.S. Rep. Chris Murphy will file his statement of candidacy with the Secretary of the Senate today, says his spokeswoman Kristen Bossi. He plans to run in 2012 for the seat being vacated by Joseph Lieberman.

Murphy, a three-term Democrat from Cheshire, will hold a conference call with reporters later today. He's flying back from Washington in time for a gathering with supporters at 5 p.m. at the Waverly Tavern in his hometown.

Murphy's news is the third big political announcement this week: Democrat Susan Bysiewicz announced Tuesday that she is running for Senate. And yesterday, Lieberman announced his retirement when his term ends.

Connecticut had fallen off the tourism map during the administration of Republican Gov. M. Jodi Rell.

Now, though, it's back on the map under Gov. Dannel P. Malloy.

Former Secretary of the State Susan Bysiewicz released a statement today on Chris Murphy, her new rival for the Democratic party's nomination for U.S. Senate:

"I welcome Congressman Murphy to the race. I look forward to a spirited discussion of the issues over the course of this campaign, focused on creating jobs right here in Connecticut."

As the new state budget director, Benjamin Barnes will be one of the most important players in the new administration of Gov. Dannel P. Malloy.

With a projected deficit of $3.4 billion in the next fiscal year, Barnes has been working non-stop on the numbers in a job that he says is "all-consuming'' and is a "once-in-a-lifetime opportunity.''

Barnes, 42, appeared Thursday in front of the legislature's nominations committee, which took the first step toward approving Barnes's nomination by holding a public hearing.

The state's projected deficit, Barnes said, is essentially unchanged from the Office of Policy and Management's projection in November - under Republican Gov. M. Jodi Rell.

"We're still in a big hole,'' Barnes told legislators Thursday. "I am hopeful. In the last recessions, two years later, things were rebounding. If I peg it to the Lehman Brothers collapse, two years was four months ago.''

The Lehman bankruptcy came in mid-September 2008, which started the cascading downfall of stock prices on Wall Street and threw the nation into a deeper recession.

In his new job, Barnes said he is already focusing on Medicaid, which is one of the largest portions of the $19 billion state budget and "demands attention by its sheer scope.'' With the upcoming changes in the nation's healthcare system in 2014, Barnes said the date of 2014 might seem far away but is actually right "at our door.''

On a day-to-day basis, Medicaid is being overseen by one of Barnes's appointees, Anne Foley, who is a longtime employee in the budget office through several administrations.

In his testimony, Barnes said he is looking for "a culture of investment'' as a way of using state funds to leverage improvements in state services.

Senate Majority Leader Martin Looney, the committee's co-chairman, asked Barnes about promoting regionalism in a state that has 169 towns that have been "jealously self-protected fiefdoms'' through the decades.

The bespectacled Barnes responded that the regions need to function well in a wide variety of areas, including transportation.

"It's the traffic jam in Norwalk that makes it take so long to get to Stamford,'' Barnes said. 

Senate President Pro Tem Donald Williams, who will be dealing extensively with Barnes as the budget is negotiated in the coming months, welcomed his new colleague as the state faces one of the largest deficits in its history.

"While I say congratulations, you also have my condolences, but we're in this together,'' Williams said.

In answering questions from Republican Sen. Len Fasano, Barnes said that paying 10 percent of the state's budget on interest and principal is "moderate debt service'' when compared to other states.

"In Stamford, we always aimed for 10 percent,'' Barnes said. "Our debt levels were consistently characterized as moderate by the rating agencies. ... I think 10 percent is moderate. It's a good goal.''

He added, "As you exceed 10 percent of the budget, there has to be a rational reason for doing that.''

With high unemployment and low interest rates, Barnes said, "Now is a very good time for the state of Connecticut to be making capital investments.''

Governor Dannel P. Malloy will unveil his budget on February 16 - despite widespread reports to the contrary.

The rumor mill at the state Capitol has been operating at full throttle as legislators and lobbyists have been saying that Malloy's budget address would be pushed back to Wednesday, February 23, in order to postpone any bad news from the budget until after the special elections on Tuesday, February 22.

But it's not true.

"No. I think people are speculating because we're having special elections,'' House Speaker Chris Donovan told Capitol Watch on Thursday. "The governor has said he's coming February 16. The Capitol people love spreading rumors. People like to speculate all the time. February 16 and February 22. Those are two big days.''

Through the complications of state statutes, Malloy was already able to push his budget speech back to February 16 - as it is the first session day after February 14.

This has been quite a year for Roy Occhiogrosso.

His friend and political candidate for the past six years, Dannel P. Malloy, was elected as Connecticut's governor. After Malloy's inauguration, Occhiogrosso took over as a senior adviser in a position of high influence in the new administration.

At the same time, Occhiogrosso's beloved New York Jets are having one of their best seasons ever, and they are headed to the AFC championship game this Sunday in Pittsburgh.

Occhiogrosso, 45, clearly ranks as one of Connecticut's top Jets fans - having been a diehard supporter for more than 30 years. He rarely misses a game, and he traveled last year to Indianapolis for the AFC championship game against the Colts.

As passionate about the Jets as he is about politics, Occhiogrosso can mention games and specific plays that happened decades ago as if they happened yesterday.

When asked about the greatest highlights through the years, Occhiogrosso says, "There haven't been that many of them.''

Instead, he has watched the up-and-down nature of the Jets - with years of high promise followed by mediocrity and failure. 

 "They were 27 minutes away from the Super Bowl under Parcells, and Curtis Martin fumbled,'' he remembers.

In the same way, he mentions the infamous playoff game in January 1987 when All Pro defensive end Mark Gastineau was penalized for roughing the passer against the Cleveland Browns, leading to a 23 to 20 victory in double overtime for the Browns. The Jets held the lead at the time of Gastineau's controversial penalty, which turned the game around.

There's a movement afoot to draft Keith Olbermann to run for U.S. Senate in Connecticut in 2012.

Small problem: he doesn't actually live in the state, though he used to. But that hasn't stopped a Daily Kos contributor who goes by the name Stranded Wind from flouting the idea. He or she has set up a Facebook page and a Twitter account promoting Olbermann's candidacy.

"So ... now that Keith has been thrown out by the Comcast merger ... he'll take a few weeks off, clean the garage, maybe go fishing ... but a man his age is nowhere near ready for retirement,'' Stranded Wind writes. "He is, however, just old enough, smart enough, polished enough, and has all of the other attributes that would make him a darned good Senator for the state of Connecticut."

Olbermann could easily move; candidates from Robert Kennedy to Hillary Clinton have done it in the past. And he certainly has name recognition.

h\t CT Capitol Report

Longtime attorney William M. Rubenstein was nominated Monday by new Gov. Dannel P. Malloy as the state's next consumer protection commissioner.

Rubenstein, 59, worked directly on consumer protection issues from 1986 through 1997 when he worked for Attorney General Richard Blumenthal in the office's antitrust and consumer protection unit.

Along with Blumenthal and others, Rubenstein worked on the case of Connecticut v. Philip Morris, in which the state won and eventually collected billions of dollars in a tobacco settlement.

Before his work in Connecticut for Blumenthal, Rubenstein served as counsel for the Federal Trade Commission, specializing in cases on unfair trade and antitrust.

Today, he serves as a partner in the Hartford law firm of Axinn, Veltrop & Harkrider LLP.

"Returning to public service is a great opportunity, and I am excited to take on this new role on behalf of the citizens of Connecticut,'' said Rubenstein, a registered Democrat who lives in West Hartford.

While he is constantly flying around the country on official business and for Democratic fundraisers, Vice President Joe Biden took time Monday morning to report for jury duty.

His office announced that he reported to the local Superior Court at the New Castle County Courthouse in his hometown of Wilmington, Delaware.

"The Vice President will participate in the standard jury selection process in his capacity as a private citizen,'' the office said. 

Rahm Emanuel is trying to avoid becoming the Susan Bysiewicz of Chicago.

Like Bysiewicz, Emanuel is now facing a court ruling that will keep him off the ballot in Chicago's mayoral race on Tuesday, February 22.

In a 2 to 1 ruling, an appellate court said today that Emanuel did not meet the residency rule in Chicago - meaning that a person must live in the city during the year before running for office.

Emanuel immediately said he would appeal the ruling to the Illinois Supreme Court in order to have his name placed on the ballot next month.

Reuters is reporting that World Wrestling Entertainment stock fell 15 percent on Monday after the Stamford-based entertainment company forecast 4th quarter earnings far below what Wall Street had expected.

WWE Chairman and CEO Vincent K. McMahon will present the 4Q earnings report before the market opens on Feb. 10. But the company said Friday that earnings will be in the range of 8 to 10 cents a share; analysts had been expecting an average of cents a share.

An analyst quoted in the Reuters piece, Michael Pachter of Wedbush Securities, attributed the company's lower than expected forecast to a slide in pay-per-view and live event sales, which together accounted for the bulk of the company's 2009 revenue.

Will any of this have an impact on the political plans of McMahon's wife, Linda McMahon? She spent about $50 million on her losing bid for U.S. Senate in 2010 and is said to be considering another run in 2012.

Gov. Dannel P. Malloy strongly ruled out any chance of Connecticut declaring bankruptcy in order to avoid paying its debts.

The concept of declaring bankruptcy has been spreading around the country, but it will not happen in the Nutmeg State.

"Oh, no. I'm ruling it out,'' Malloy told reporters Monday at the state Capitol complex. "I think this is politics. I think it's wrong-minded. I think it's extremely dangerous to the municipal bond market and has the potential of setting back our national economy to a very large extent, affecting our national and international marketplace for municipal debt. This is just not thought-out. That really is crazy talk.''

Connecticut is facing one of the biggest budget deficits in its history as the national and state economies remain sluggish. With reduced tax collections as unemployment remains high, the state is facing a projected deficit of $3.5 billion for the fiscal year that starts in July.

Malloy is expected to unveil a package of tax increases and spending cuts in order to close the deficit when he unveils his budget on February 16.

As other states face problems similar to Connecticut, talk has spread around the country of allowing states to declare bankruptcy. In theory, that would allow them to avoid paying the massive pensions that are owed to state employees - some of whom earn pensions of more than $100,000 per year and at least eight earning more than $180,000 per year.

"If states start declaring bankruptcy to avoid agreements that they've made, it will become quickly impossible'' to sell bonds in the municipal bond market on Wall Street, said Malloy, who was supported by all of the major state-employee unions in last year's election.

"If you start allowing any of the 50 states to declare bankruptcy, the marketplace will disappear. That's why this discussion is really quite insane,'' Malloy told reporters. "It is a classic example of a divisive issue that someone wants to capitalize on. To be able to say that people could avoid their obligations with the stroke of a pen is very attractive.''

Nationally, a small number of local communities have declared bankruptcy through the years. States, however, are currently prevented from declaring bankruptcy under federal law.

"President Obama will present our nation's agenda for creating jobs and a plan for us to out-innovate, out-educate, and out-build the rest of the world," Larson said in a press release announcing his guest. "Strengthening our economy and bolstering competitiveness are goals, both myself and Gov. Malloy, believe are needed to secure our state's prosperity. We face challenges nationally and at home, however with common ground with our President and a strong partnership with our Governor, I am confident that we will succeed now and win in the future."

Tradition dictates that members of Congress bring a special guest or distinguished constituent to Washington to hear the president's annual address.

U.S. Sen. Richard Blumenthal, attending his first SOTU address as a sitting senator, will bring his oldest son, Matthew, a member of the U.S. Marine Corps.

U.S. Rep. Chris Murphy has invited John Yrchik, who lives in Murphy's hometown of Cheshire. Yrchik is executive director of the Connecticut Education Association, which represents 41,000 educators in the state.

U.S. Rep. Joe Courtney is bringing Robin Chesmer, a dairy farmer and one of the founders of the Farmers Cow collective.

U.S. Rep. Rosa DeLauro's spokeswoman, Kaelan Richards, said she had no information on who - if anyone - the 3rd District congresswoman was taking to the speech. U.S. Sen. Joseph Lieberman also did not provide information about the senator's guest. And the office of U.S. Rep. Jim Himes did not respond to an email seeking comment.

The congressional invitees aren't the only Connecticut residents attending tomorrow's speech: Ursula M. Burns of Norwalk, the CEO of Xerox Corp., is sitting in First Michelle Obama's box.

According to the White House, Burns is helping to lead the administration's campaign to improve science, technology, engineering and math education. She also serves on the board of Change the Equation, a coalition of CEOs focused on science and math education. And she was appointed vice chair of the President's Export Council last March.

A proposal by the group Third Way to reduce partisanship in Congress by having members of different parties sit next to each other at tomorrow's State of the Union address has spawn some political odd couples, like New York Reps. Peter King and Anthony Weiner, who got into a shouting match on TV last year.

But among the Connecticut delegation, there are few surprises. U.S. Sen. Joseph Lieberman is sitting with his Republican BFF, John McCain, as well as Sen. Tom Udall, a Democrat from New Mexico.

Rep. Joe Courtney, a Democrat from eastern Connecticut, is sittin with Rep. Glenn "GT" Thompson, a Republican from north central Pennsylvania. The two have worked together on the congressional Dairy Farmers Caucus.

Sen. Richard Blumenthal is planning to sit with a Republican colleague, said his spokesman Ty Matsdorf, but he did not specify who it would be.

The other members of the state's delegation have yet to respond.    

After a full day in Hartford, Gov. Dannel P. Malloy will head back down to DC in time for tonight's State of the Union address.

Malloy will stay in Washington for about 15 hours. In addition to hearing the President's speech, on the invitation of U.S. Rep. John Larson, Malloy has other business.

He will meet with a candidate for state Department of Transportation commissioner, his office said. Malloy will also talk with U.S. Rep. Joe Courtney over breakfast about Route 11 and other transportation issues in the southeastern part of the state.

"While I'd like to stay longer and meet with other members of our delegation, there's more snow in the forecast for later in the day on Wednesday and it's important that I get back to the state," Malloy said in a statement.

Incidentally, the state will pick up the tab for Malloy's trip, said his spokeswoman Colleen Flanagan. "That's why he wanted to be sure to pack in as much as he could in about a 15-16 hour timeframe,'' she said.

Republican legislative leaders this morning outlined their plan to reform and "right size" state government.

The plan calls for cutting the state's workforce by 5 percent, merging state agencies and freezing state employee wages for two years, among other reductions.

One thing it doesn't include: an increase in taxes. House Republican Leader Lawrence Cafero and his counterpart in the state Senate, John McKinney, did not rule out raising taxes. But both men said the conversation about how to deal with the state's budget crisis has to begin with reducing the scope and size of state government.

"We believe the level of taxes we have right now [is] certainly sufficient and in some cases, too great,'' McKinney said at a late morning press briefing.