Capitol Connection: A Disappearing Act

April 1, 2014

From the Office of State Senator Kevin Witkos

Connecticut is buzzing with conversation about the state budget. Some are celebrating a surplus. Others are warning about a deficit. But when you take a closer look at the numbers, it almost feels like you are watching a magic show. There are revenue tricks and gimmicks, disappearing acts where deficits dissolve into thin air, and illusions of healthy spending habits.

The ruse and spectacle make it confusing and difficult to fully understand the financial outlook for our state. So, let’s take a minute to unmask the budget lies and truths.

This year, the conversation is focused on the supposed “surplus” in Connecticut. The governor says that we have a $504 million surplus thanks to smart budgeting for Fiscal Year 2014. While there is leftover money this year, it is not a true surplus because Connecticut paid for its expenses with borrowed money. Our state borrowed $1.5 billion over the past few years, and $914.2 million in 2014 alone. Calling excess funds a “surplus” when we are still so indebted to others is not fully honest, and it creates a dangerous illusion of stability.

Tricks and gimmicks were also used to bring about this “surplus.” The state grew its coffers with over $867 million worth of one-time budget items. Connecticut pushed out debt for two years, moved millions of operating dollars to bonding, and relied on hundreds of millions of dollars from one-time revenue sources, like the tax amnesty program. These tricky maneuvers made money magically appear and deficits disappear.

The disappearing act continues in the governor’s proposed 2015 budget. Last week, the Office of Fiscal Analysis uncovered a major $70 million hole in the governor’s plan. How did this huge chunk of the budget simply vanish? The governor deliberately ignored warnings from key officials and shortchanged retirees’ healthcare and magnet school line items. Why would he do such a thing? We continue to ask that very question.

To fix this most recently unveiled trick, money will have to come out of that alleged “surplus” to offset the multimillion dollar hole. And, despite a shrinking “surplus,” the governor is still set on promoting his illusion of plenty. He still wants to issue $55 tax rebate checks to everyone in Connecticut, a gimmick that would cost the state over $155 million.

If we were honestly in a healthy financial state I might support rebates. But, the truth is times are bad, and giving everyone an extra $55 is not going to help Connecticut in the long run nor will it create a thousand jobs that the Governor claims it will. When we get past all the magic show trickery, and look ahead to Fiscal Years 2016-2017, we are left with a projected deficit of well over $2 billion!

In Connecticut right now, there is an illusion that the state’s pockets are deeper than they really are. While today may not look so bad, the disappearing act has not eliminated our deficits, but rather pushed them further down the road. We cannot magically eliminate deficits. What we need is smart spending and honest budgeting.