Wow. Have you seen this editorial?

May 1, 2016

(Please email me at Rob.Kane@cga.ct.gov with your thoughts on this must-read editorial below. Beginning Monday, you can also call CT House Democrats at 860 240-8585 and CT Senate Democrats at 860 240-8600. Ask them if they have read the editorial. Thank you!)

CT Democrats’ Budget Is No Long-Term Solution
Hartford Courant Editorial

May 1, 2016

The Democrats’ state budget for the coming year relies, not surprisingly, on short-term shuffles to solve problems without doing enough to address the $4 billion disaster the state will face very soon.

This is the old kick-it-down-the-road strategy that got the state into the near billion-dollar mess legislators are desperately trying to rectify this week.

Haven’t they learned?

Some of the Democrats’ ideas have merit. For example, the budget caps nonunion pensions at $125,000 per year. A cap is a good start, and overly generous pensions — and makeup payments on the underfunded plan — are a massive drain on state coffers. The budget also consolidates a number of state agencies and increases health care premiums and co-payments for nonunion employees and legislators.

Putting pensions and benefits on the table is a good move. If nonunion employees take the lead, that could encourage state employee unions to negotiate a more reasonable package when those contracts come up for renewal in 2022.

But mostly, instead of cutting spending by making real structural changes, the Democrats’ budget takes advantage of one-time savings from a number of sources, many of which are simply delays in funding that maintain spending in the future.

The worst part of the budget — which shows just how addicted the Democrats are to this asinine steal-from-tomorrow death spiral — is the ludicrous idea to gain a quick $60 million in “tax credit deferrals” to corporations.

Here’s how it works: If a company agrees to postpone using a 70 percent tax credit now, that credit will be worth 90 percent in 2019, according to a spokesman for the House Democrats. A corporation with a $1 million tax bill, for example, that agrees not to use its credit to reduce its bill to $300,000 now would have its bill cut to $100,000 in the future, saving it (and costing the state) $200,000 in taxes.

Any business that takes advantage of the offer would essentially be lending the state money at exorbitant interest.
And that means the state will have that much less tax revenue just when it will need it most: in the 2017-19 biennium, when $2 billion shortfalls are already built into each year’s budget.

One Republican legislator reportedly called the idea “exceptionally poor.”

It’s tempting to ask what the Democrats were smoking, but there’s not enough marijuana in the world to make that plan sound like a good one.

Across the board, the budget conjures up savings and income for the fiscal year that begins July 1 from a wide range of sources, including from anticipated but not guaranteed legal settlements, job cuts and Medicaid payments.

This is the kind of budgetary finger-crossing that legislators have been guilty of for years.

As Gov. Dannel P. Malloy’s spokesman said after the plan was unveiled, “It contains too much ‘business as usual.'”

Income and corporate tax receipts are falling below projections, and as new revenue numbers come in, the bleak picture continues to darken.

If the Democrats pass this budget without involving Republicans or Mr. Malloy in talks, the governor has said he would veto it, and he should.

The Republican plan has tough suggestions that could put the state on firmer financial footing, and along with the governor’s budget, there is a place to start talking.

If only the Democrats’ plan were worth talking about.