It maintains many of the same spending increases that Rell’s budget does, but it lowers the amount of Education Cost Sharing funds the municipalities receive and includes no income tax increase.

How does it do this?

Cafero said Republicans looked at the past 14 years of state revenue and found that the state - with some exceptions - underestimates its revenue by about 3.5 percent. That means the state is overtaxing its residents by the same margin, Cafero said. He said that means there will be $550 million more available in 2008 and $570 million more in 2009. With that money Republicans would increase Medicaid reimbursement rates for hospitals and other health care providers, raise the cost of living increase for private providers, increase enrollment in HUSKY, eliminate the $250 business entity tax for small companies, and put $23 million more in municipal programs.

It would use surplus money to help fund the teachers retirement fund, help out dairy farmers, and increase funds for nursing homes that were cut in both the Democrats’ and Rell’s budgets.

In order to avoid an income tax increase, Republicans would lower the ECS funding to $154 million in 2008, and $204 million in 2009. Cafero said those figures still are substantial increases in education funding. Rell proposed spending $228 million in the first year and the Democrats’ plan calls for $204 million in the first year.

Cafero said towns like Madison, Stamford, Fairfield, and Bethel that lost dollars under the Democrats’ plan, would get more. On just the education funding alone, Republicans may gain the support of some Democrats upset with their party’s proposal.

Sen. Ed Meyer, D-Guilford, said Monday that he met with Rell last week to talk about her budget proposal, which he supports. Meyer, one of Rell’s harshest critics, said he supports the governor’s budget because she would increase education funding to his towns.

Meyer said the governor’s proposal does not discriminate against the smaller towns, about 43 of which receive less under the Democrats’ plan. Secondly, Meyer said Rell’s proposal includes education accountability measures such as a high school exit exam and full-day pre-kindergarten. And it ties the increase in funding directly to property tax relief by capping municipal budgets at 3 percent annually. He said it might not be “politically palatable,” but he sees it as the better proposal.

Click here to read about why the Hartford Courant endorsed Rell’s budget. Click here to read a Stamford Advocate article about how Fairfield County Democrats disagree with their own party’s proposal. Click here to read some interesting comments from CT Keith on Rell’s proposal and how isolated she may be at the Capitol.