Crunching the Numbers

First and foremost, I would like to thank my legislative intern Jason Langeway for writing the last two weekly columns. Over the past several months, he has proven to be a hardworking and dedicated member of my support staff, and I look forward to working with him during our clean up event at Peoples State Park on May 18th. Now that we are in the month of May, there are only four weeks remaining in the 2013 legislative session. That means it’s crunch time here in Hartford.

One of the things we have been crunching is the numbers for the next two-year state budget, and I would like to provide you with an update in this week’s column. Unfortunately, the projections are raising some concerns. If you remember back to early February, Governor Malloy presented his proposal for the next two-year state budget. While the governor typically begins the budget process, it is the responsibility of the legislature to develop and pass the budget into law.

Every two years, the process begins once again. To better understand the difference between the two committees responsible for developing the budget, the Appropriations Committee decides how taxpayer dollars are spent while the Finance, Revenue and Bonding Committee decides how to pay for the budget through taxes and borrowing.

On Friday, April 19th, the Democratic chairs of the Appropriations Committee announced their proposed state budget that would spend $43.9 billion over the two year period. It is slightly different from the Governor’s proposal and increases spending by several million dollars. While this is the latest version, there will likely be additional changes over the next month as negotiations continue.

An interesting side note is that the state government is limited by a spending cap. In order for it to comply with the spending cap, this budget proposal would simply redefine the cap to ensure compliance. It certainly seems to defeat the purpose of a spending cap, and many have raised concerns over this aspect of the proposed budget.

Last week, we also received an updated projection from the Governor’s budget office and the non-partisan Office of Fiscal Analysis. Their latest consensus revenue report painted a positive picture for the rest of this year’s budget but raised some serious concerns for the state of the budget during each of the next two years. How could this discrepancy occur?

In December, many state residents sold their stocks or distributed gifts to take advantage of lower tax rates before the federal government increased tax rates in the new year. This process was a one-time revenue increase that will help our state resolve the budget deficit in the short term but will also make it all the more difficult in the next several years.

How will these projections affect the state budget? This report reduced the expected revenue in the next fiscal year by $259 million and by $229 million in the following year for a total reduction of $488 million. The increased budget and reduced revenue projections means only one thing: future budget deficits that will hamper our state’s economic recovery.

Needless to say, this proposed budget is too large and simply unsustainable. The revenue projections do not meet the increased level of spending and will ultimately require future tax increases to balance the budget. As a member of the legislature’s Finance committee, I will be working against any potential tax increase because we simply cannot continue to increase the burden on hardworking families and businesses. If you would like to review the proposed budget for yourself, please visit the Appropriations Committee website at www.cga.ct.gov/APP.