Balancing the State’s Budget

As we enter in to the General Assembly’s 2011 session, we do so with a new Governor and several new faces in the legislature. The one thing that remains the same, however, is the need to address Connecticut’s looming budget crisis. Over the next two fiscal years, Governor-elect Dan Malloy and the legislature will face a projected $7.25 billion deficit. Our top priority in the coming months will be to eliminate this deficit in a responsible way.

While the effects of the recession still resonate throughout our country and state, it is important to note that the recession was not the sole cause of Connecticut’s fiscal insolvencies. Partisan politics, procrastination, an overreliance on borrowing and excessive spending were also major contributors to our state’s budget shortfall. This year, while Connecticut continues to be overwhelmed with unemployment and lost revenue, it is imperative that we in the legislature do not repeat past mistakes.

To help illustrate Connecticut’s spending addiction, consider this statistic: Over the last 20 years, state government spending has increased 227%, rising from $4,400 per household to more than $10,000 while median household income has remained relatively flat. It is past time that our government rein in spending in an effort to aide taxpayers rather than balance the state’s books on their backs.

To begin seeking out long-term solutions toward economic recovery, the legislature must address the inefficiencies and excess of state government by adopting initiatives that reduce both the size and cost of our government. The legislature should implement commonsense policies that eliminate waste by consolidating state agencies, engaging private companies that can perform public duties at a lower cost, and placing a moratorium on the creation of new government programs. State government has simply grown beyond taxpayers’ ability to pay for it, and we need to reverse this trend

A positive step towards economic recovery is Governor-elect Dan Malloy’s endorsement of Generally Accepted Accounting Principals (GAAP), a plan that has been proposed by Republican leaders. GAAP is a set of rules established by the Financial Accounting Board which will be used to more accurately and transparently report our state’s revenue and expenditures. Adopting GAAP as our reporting standard will likely provide a more exact portrait of the impending fiscal challenges and is expected to show that our deficits are even larger than currently predicted. GAAP will also prevent the legislature from using the past accounting trick of acquiring expenses in one fiscal year, but paying for them in the next, in order to falsely report a balanced budget.

Along with getting our state’s spending and accounting in order, the legislature must also seek out healthier avenues to increase revenue. Raising taxes has ceased to be effective in stimulating growth and has earned Connecticut its anti-business reputation. By implementing policies that create tax incentives and ease financial burdens on our small businesses and entrepreneurs, we will attract jobs and prompt economic development. Only by expanding our tax base will the state generate the added revenue necessary to reduce the deficit.

Reduce government spending and create jobs. Those basic goals must guide the legislature’s every decision in 2011. If they do, we will have successfully closed Connecticut’s budget shortfalls buy the June 8th adjournment of the 2011 legislative session. The decisions we make in the coming months will shape Connecticut’s economy and way of life for generations to come.