Taxes, Borrowing, Deficits and the Failure of it All

I keep asking myself: how on earth could the legislature vote to pass – and our governor sign – a budget knowing full well that it is not balanced?

Just four years ago our state was facing a massive budget deficit, so the Democratically-controlled legislature and Governor Malloy increased spending and enacted the highest tax increase in state history. Now we’re facing another billion-dollar deficit and what do they do? You guessed it – increase spending and raise taxes.

Even with the Democrat’s modest retreat on taxes – in response to a resounding outcry from residents and businesses – the $40.3 billion budget still carries the second highest tax increase in our state’s history. And, unfortunately, in three years we’ll be facing another structurally devastating deficit, this time to the tune of $1.74 billion.

It’s no wonder that a new report from the Mercatus Center at George Mason University ranks our state as 47th in the nation for overall fiscal condition. The report shows that in the long run, “Connecticut’s fiscal metrics point to several areas of weakness” and ranks the state’s finances among the worst in the country.

Clearly, piling on more and more taxes is not the answer to our budget challenges.

We have to fundamentally change the way state government operates – and it has to start with our budget process.

As the Hartford Courant points out in its June 29 editorial, every constituency has taken a hit in this new budget – from businesses and hospitals to homeowners and the disabled – except one, state employees, which represent nearly one-third (32%) of our budget expenses.

Connecticut has more than 40,000 state employees and this budget, shockingly, will add another 135. It also allows for an astonishing $223.8 million in overtime pay. Meanwhile, departments that provide services for the disabled are funded at woefully inadequate levels and businesses are saying this tax-laden budget and our unfriendly business climate are forcing them to leave the state and take with them valuable jobs and community contributing employees.

That is terrible news for our families, and job losses will have a profound and devastating impact in our communities.

Corporations like GE, Bristol-Myers Squibb and Hallmark Cards did not just decide overnight that it may make sound business sense to leave Connecticut. While the budget may have been the final straw, our state has been heading down a dangerous road for the past several years, as the one-party rule has perpetuated an unsustainable and irresponsible tax-and-spend approach to budgeting and borrowing that drives our state deeper and deeper into debt year after year and continues to place a greater burden on residents, businesses and our towns and cities.

Our state budget has grown at a mind-boggling rate. While the Governor likes to reference low budget growth rates, in actuality when accounting for payments that Gov. Malloy has shifted from operating expenses to bonding expenses or from appropriated expenditures to revenue intercepts, Connecticut’s expenditures in the general fund are actually 30% higher than what is being captured. Thirty percent higher in 6 years, making a mockery of our constitutionally mandated spending cap limits!

At the same time, our borrowing has skyrocketed to unbelievable levels. While some borrowing is necessary, for critical investments in transportation infrastructure and public safety, for example, bond indebtedness has grown by $1.9 billion since Gov. Malloy took office and now finance charges account for 12.5% of our appropriated budget expenses (even though it is underfunded to the tune of $305 million in the biennium).

Democrat leaders, through their unilateral actions in the legislature and in comments in the media, have said it is their responsibility, as the majority party, to pass a budget.

Really?

It shouldn’t matter what party is in the majority; we are all elected to represent the people of Connecticut – and not one of us in state government got 100% of the vote. We all have Democrats, Republicans and Independents who we are accountable to. And those people expect us to work together on their behalf, especially on the budget – something that directly impacts our quality of life.

Moving forward — despite my deep concerns about the ill-fated direction this budget puts us in — we can make positive changes, restore people’s faith in the political process, and better position Connecticut for sustained growth and prosperity.

I still believe in the greatness of our state and its people and remain convinced that our best days are ahead of us, but only if we in the legislature take the time to truly listen to our constituents and have the courage and discipline to represent and govern on their behalf, not our party’s.

State Senator Tony Hwang is in his 4th term in the Connecticut General Assembly and 1st term as State Senator of the 28th District, which encompasses Fairfield, Easton, Newtown and portions of Weston and Westport. Senator Hwang is the ranking leader in the Housing and Labor & Public Employees Committees and a member of Commerce and Veterans Affairs committees during the 2015-16 legislative sessions. He is also a member of the CT Innovation Life Sciences Business/Government Group and co-chair of the bipartisan General Assembly Bioscience Caucus.