Connecticut Has A Spending Problem . . . And A Borrowing Problem

January 29, 2010

The signs of economic distress are everywhere – in our towns, our homes, our businesses and places of worship. Connecticut citizens are paying attention, and elected state officials who ignore what they are telling us do so at their own peril.

If we thought that passing a state budget was difficult last year, just wait. This year’s three-month legislative session will be brutal. Here is a recap. In 2009, we borrowed to cover a nearly $1 billion dollar shortfall. When the legislature, months behind schedule, finally passed our existing biennial budget, the best that majority leaders could produce was borrowing against future revenue streams, draining the Rainy Day Fund, spending one time federal stimulus funds, raising taxes on families and businesses, doubling nearly every fee levied, and not fully funding the already underfunded state pension fund. Passing this disastrous budget – which I vehemently opposed – immediately prompted rating agencies to downgrade the state’s credit rating outlook.

Doing the right thing this year will take courage. We will open the 2010 session facing a $500.5 million deficit and declining tax revenues. There are sobering facts we must confront. State government has grown precipitously while our population and jobs have remained flat over the last decade. The rate of inflation was 19% during the same period, yet legacy costs of state employees grew 45-101% .This is unsustainable. The largest expense for taxpayers is state government. We must cut the cost of state employee wages and benefits, downsize state departments, outsource more services to cost-efficient non-profits and consolidate state agencies and commissions.

Since 90% of the state workforce is unionized, it is essential to work with state employee unions to do the right thing for taxpayers. The terms of a recent state employee union concession agreement includes no layoffs for two years – along with the ability to revisit this agreement if the budget deficit exceeds $300 million. As the deficit is now at $500.5 million, legislators who have influence with these unions should use it now to
help resolve our dire fiscal crisis.

Restructuring state government to make it smaller and more affordable would make it possible for the legislature to take bold steps to reinvigorate our economy. For example, one Democratic legislator suggested abolishing the state business taxes to attract new companies and create jobs. With the state’s unemployment rate at 8.9 percent, this is exactly the type of bold suggestion we should take seriously.

In addition to cutting the cost of our government – the largest employer in our state – and improving our business climate, my other priorities include fully funding state education aid and other state aid to municipalities. Our towns and cities depend on this money, and efforts to balance the state budget by cutting back in these two areas will only lead to higher local property taxes.

Furthermore, we must continue the great strides made in recent years to improve mass transportation as doing so will help us to rebuild our economy. Looking to the future, we must appropriately fund and support the charter schools that are providing a quality, alternative, public education to the next generation. In so many of our urban centers, they are leading the way in closing the achievement gap.

The people of Connecticut expect legislators to make the difficult, uncomfortable, decisions that they sent us to Hartford to make. It will require admitting that Connecticut has both an embedded spending and a borrowing problem. We must confront our fiscal problems and responsibly address them. No more excessive borrowing. No more unsustainable spending. No more depending on federal stimulus funding to bail us out. United States Senator Judd Gregg recently stated: “Our nation is on a path that is absolutely unsustainable.” He noted that the obligation of future generations to repay the national debt will “take away the resources they would have used to buy a house, send their kids to college or get a new car.” We in Connecticut have to do better by our children. We may be on the edge of a cliff but it is not too late to pull our state back to safety. It is never too late to do the right thing.

As always, I welcome the opportunity to talk about the issues that are important to all us. I can be reached at legislative office in Hartford at 1-800-842-1421, or via e-mail to [email protected].