State’s new budget: the good, the bad, the ugly
T he election-year spending and revenue plan passed by the General Assembly Wednesday was on time, over budget, and reform-avoidant. Meeting the deadline was never certain, so we count that as good. Failure to balance the bottom line has become chronic; that’s bad. Ugly is the word for what it will be like when lawmakers can no longer avoid the fiscal reform they put off again this year.
We would have been pleasantly stunned if the legislature had risked a stab at reform in the biennial short session of the two-year budget cycle. However, for an election-year budget, at least this one tries hard for responsible spending.
What was best about the budget process this year was the lowering of the decibel level between the Republican and Democratic caucuses in both Houses, resulting in the sort of sausage-making Connecticut residents were used to tolerating before last session’s all-time low performance. No one will be pleased with all of it, but the past few years of deficits outpacing efforts to cover them should make it obvious that budgets cannot do everything. It cannot be said too often: Connecticut needs fiscal reform.
For now the $20.86 billion plan restores some of the municipal and education aid that have taken waves of hits in recent years. By finishing on time, the legislature has given municipalities the ability to get through their own budget cycles with some idea of what to expect in state aid. Town officials expressed relief, although they know only too well those amounts won’t be sacred if midyear deficits once again threaten.
What’s bad about the FY 2019 budget is that it incorporates two more years of deficits of around $2 billion apiece. Faced with those numbers, and despite their adopted resolution last year to stand firm against the volatility of income tax revenues, lawmakers fell for the temptation to tap into this year’s tax windfall. Of the estimated $1 billion in surplus revenue, the budget appropriates about $300 million to spending. The rest may end up in the rainy day fund or, as we know, it may not.
The General Assembly session in even years is several weeks shorter than oddyear sessions because it is meant to focus almost exclusively on adjusting the previously adopted budget to any significant changes. It is timed to take place in the election year for all legislators, who serve two-year terms. Other issues can be introduced through legislative leadership, and they always are. Legalization of marijuana, collection of highway tolls, sports betting, and a third casino, tribal or non-tribal, were all on the table as possible revenue sources. All failed in one chamber or the other.
Those and other revenue proposals would be far easier to judge on their merits if state budget planners were able to view them in light of an overall fiscal stability plan. The state Commission on Fiscal Stability and Economic Growth completed its proposed multi-year strategy for debt reduction, labor costs and pension obligations in time for the session to take it up, but the best the legislature could do was to authorize studies of various aspects of their proposal — a start, but a small one.
The commission calls its report “Connecticut’s Burning Platform,” lest any legislator or anyone else forget that the state’s dire problems can’t be fixed by one new budget. It calls for cutting income taxes, eliminating $1 billion in state spending, reforming collective bargaining, and reform of the budget process itself. It suggests Teachers Retirement System reform, tolls as a way to fund transportation instructure repair, and regionalization of services by towns. It would focuse resources on key workforce and economic development.
State senators and representatives soon move into the campaign phase of the political cycle, and parties will be choosing their candidates for governor. If elected, what is each of them individually committed to do to take their fiscal responsibilities beyond the next budget and on to long-term strategy? When you see them, ask.
We would have been pleasantly stunned if the legislature had risked a stab at reform in the biennial short session of the two-year budget cycle. However, for an election-year budget, at least this one tries hard for responsible spending.