The Hard, Cold Fact About Connecticut’s State Budget

February 3, 2009

The facts about Connecticut’s state budget situation reflect a reality that some are still reluctant to accept.

The legislature’s nonpartisan Office of Fiscal Analysis (OFA) released updated figures projecting the deficit for this fiscal year at $1.35 billion, at $3.97 billion for Fiscal Year 2010, and at $4.71 billion for Fiscal Year 2011. That translates to 7.9 % of the state’s general fund budget for this fiscal year, 21.4 % for the next fiscal year, and 24.2 % the following fiscal year. Keep in mind that there is only $1.38 billion in the state’s Rainy Day Fund.

The situation is dire and unlikely to improve in the near future. According to OFA, our tax revenues for this year are falling short: personal income tax revenues by $1 billion; sales and use tax by $368 million; corporation tax by $207 million; real estate conveyance tax by $109 million; gross receipts tax from oil companies by $63 million; and casino revenues by $74 million.

Clearly the General Assembly has to get serious about addressing our state government’s fiscal problems.

So far, I am not convinced that majority leadership – which controls both chambers of the legislature by a veto proof margin – understands the need to make painful, politically unpopular decisions. In mid January, the legislature adopted a mitigation plan that reduces our budget deficit by only $124 million. Not only is this not good enough, it actually includes additional funding for contributions to a healthcare plan for employees of a business that won the low bid on a state contract. I opposed this on the Senate floor as a questionable, expensive precedent that does not recognize the state’s fiscal crisis. Check to see how your legislators voted.

The fact is that Connecticut’s households and businesses are far ahead of the General Assembly in terms of recognizing the state’s fiscal problems. Our state has a 7.1 percent unemployment rate. Connecticut lost a total of 21,300 jobs last November and December. Businesses are closing. Most towns are scrutinizing every line item in their budgets for cutbacks and asking the state for relief from unfunded mandates.

My constituents understand the situation, including one whose business recently laid off two valued employees, froze the salaries of the workers left, and required senior management to take a 35-50 percent salary cut. Sad stories like this are all too common, and many of us fear that things are going to get much worse before they get better.

As I write this, Governor Rell is preparing to give her budget address to the General Assembly. Certainly, her budget proposal will call for sacrifices beyond what any of us wants to contemplate.

I want to assure you that I stand firm with those who are serious about solving our fiscal problems. When the legislature met in January to adopt a budget deficit mitigation plan, some of us proposed cutting the salaries and benefits of legislators and state officials. It is important to demonstrate that we are willing to join our constituents in making the sacrifices that will be demanded of all of us. Sadly, this proposal was rejected.

It could be that too many members of the General Assembly are still in denial about the dismal state of Connecticut’s economy and feel that in just a few short months there will be a reversal. Various committee chairs are looking at raising fees and eliminating certain tax exemptions. One so-called cost savings proposal being offered calls for decriminalizing the possession of small of amounts of marijuana by requiring offenders to just pay a fine as a revenue source. At best, that is an irresponsible unhealthy suggestion that I will certainly oppose if it ever comes to a vote.

As a member of the General Assembly’s Finance, Revenue & Bonding Committee, I expect to be very involved in the debates that will ensue. I welcome the opportunity to hear your ideas and urge you to contact me at my legislative office in Hartford at 1-800-842-1421 or via e-mail to [email protected].