The State Budget Adjustment-Unwise Fiscal Planning

Several weeks ago, the state’s non-partisan Office of Fiscal Analysis announced that current figures indicate that revenues had exceeded expenditures, and Connecticut had a $250 million surplus for Fiscal Year 2004. As many of you are aware of, Connecticut faced an economic downturn the last several years brought on partially by years of unwise spending on the part of the state legislature, so this turnaround was indeed great news.

I advocated for using a portion of these funds to immediately return the property tax credit to $500, from the $350 it had been lowered to last year, and to put the remainder in the state’s Rainy Day Fund to be used down the line on anything from education to healthcare to town aid.

However, before some legislators even had a chance to blink an eye, certain legislative leaders had already drafted legislation that unwisely spent the entire surplus. I found that increasing state spending by about $235 million in Fiscal Year 2004 just one year after facing a record deficit of over $1 billion, was short-sighted and irresponsible.

Following years of deficits, the prudent thing would be to save at least a portion of the money in the state’s Rainy Day Fund. Despite the upswing, there is no guarantee that these surpluses will become regular occurrences. Legislation such as this would bring us back to the same tax and spend mentality that caused such huge state deficits to begin with. The bill came before me in the State Senate and for the good of the future financial health of the state and in order to reestablish a sound economic base, I had no choice but to vote against it.

This legislation did address the middle class property tax credit, but went about it in the wrong way. Rather that implementing it immediately, so the hard working middle class families who sacrificed during the leaner economic climate the last few years could have the benefits of a tax credit this year, this bill delayed it until the 2005 tax year.

The biggest structural danger in this budget is its reliance on one-time revenues and unfunded expenditures that will not be there beyond 2005. If we continue to spend at our current rate in 2006, without these sources to draw money from, we could face a $548.3 million deficit in 2006 ! So, essentially, by passing this legislation, some legislators chose to go from a $250 million dollar surplus to the very real possibility of a $548 million dollar deficit in merely two years. Only government could ever go from such a great financial condition to a deficit. That alone should provide ample reason for why I voted against this bill.

This budget was not good for the people of East Haven, North Haven, and Wallingford as well as the other citizens of the state of Connecticut. I am fearful that increased spending now will mean tax increases down the road, which is the last thing the great people Connecticut want or need. I enjoy your feedback, so please feel free to call me at (800) 842-1421.