‘Senate Circle’ Budget chaos

This is an unprecedented time in our political history. When we think of Connecticut, we think of its classic colonial heritage of a solid steady state. Sadly, this is no longer the case. We are now engulfed in chaos, or as the New York Times observed a “liberal joy ride” with the taxpayers being held hostage.

As taxpayers and small businesses desperately work to regain their financial footing, new sales taxes will hit on July 1st. New higher income and corporate tax increases will be assessed on August 1st and will be retroactive to January 1, 2011. The largest tax increase in our time could further delay a recovery and our new administration is seeking to concentrate power in the executive office by limiting legislative oversight of the budget.

On Saturday, June 25th, each member of the state legislature received formal written notice that the General Assembly will convene for a special session on Thursday, June 30th. A proclamation issued by Governor Malloy was brought, by state trooper, to the homes of each State Senator and State Representative mandating their attendance in special session following the state workers’ failure to ratify the union concession deal.

The Governor sought concessions of $1.6 billion from the state’s workforce, but that labor agreement did not receive the necessary votes from union members. A statutory balanced budget requirement forces the legislature to take action before the last day of this fiscal year.

During this special session, we will debate and vote on a measure granting Governor Malloy greater rescission authority to make unilateral spending cuts in order to fill the $1.6 billion gap in the state budget. The Governor is seeking to double his authority to 10 percent and also gain control over municipal aid cuts.

The Governor’s request for such an increase in rescission authority brings our state into unchartered territory. And as Connecticut’s constitution mandates, making those decisions are the responsibility of the General Assembly. The Governor presents a budget and the legislature deliberates, adjusts and votes on the final balanced budget.

I completely agree with State Senator Kevin Kelly when he stated, “The Governor is seeking unprecedented rescission power to unilaterally make the necessary cuts to the budget to make it balance. My concern is that the separation powers under the State Constitution granted this authority to the General Assembly not the Governor. As such, this is not a Republican or Democrat issue, but one of Constitutional importance to protect the legislative institution. Keep in mind that the legislature is a separate and equal branch of government. While we may have one party rule as a result of the election, we do not have one branch rule under the Constitution. I believe we were elected to do that job and cannot delegate it to anyone else.”

As of June 28th, the Governor had presented budget recommendations that would include 5,466 state employee layoffs, the elimination of 1,000 currently vacant positions, and up to a 3 percent cut in municipal aid in order to fill the gap left by the failed concession agreement.

The Governor also plans to address his new entitlement program called the earned income tax credit (EITC) or as I refer to it as an un-earned income tax credit. This new program – a key component of the Governor’s budget -takes a part of the new income tax increase (approximately $220 million over 2 years) and creates a program with additional staff hired to distribute income tax revenue checks to those who do not pay income tax.

During the special session, the Governor wants to reduce this 30 percent tax windfall to 25 percent. Some would like to completely eliminate the program and save $220 million and put it toward saving current jobs slated for layoffs. Some critics say this is a socialist redistribution of income at the expense of the free market system, believing that an EITC and the higher income tax brackets required to pay for it would be a disincentive to job creators who are desperately needed during this economic time. They believe that a one time check does not replace the availability of a steady job.

It is uncertain at this time if these proposals will actually be implemented or are just a charade to bring the unions around to the best state labor agreement in the country.

I expect that this special session will draw much debate before members of the legislature cast their final vote. It is worth noting that for more than two decades the general assembly has been in the hands of a Democratic majority. Now with a Governor from the same party, the checks and balances have created what many believe is a one party rule. The residents of Connecticut deserve a fair and balanced budget process and one has to ask:

Is the Governor’s threat to layoff state employees a delay tactic to allow for union leadership to change the rules and a process mandated by their own by-laws – thus allowing a re-vote?

Will the final decision be delayed until the end of August to forestall any reform concerning overtime, longevity bonuses, paid sick leave?

Will the shared sacrifice truly be shared, or will it continue to fall on the backs of taxpayers?

The next few months will tell us if the states’ ship will be able to steady itself and stay afloat.