Dire budget problems require a new approach

Malloy’s budget does not even begin to address the scale and severity of our state’s problems.

Connecticut, we have a problem.

Even now, lawmakers are conducting a normal discussion about the budget — debating what’s been funded, at what level, and how. But here’s the problem: what’s happening in Connecticut is emphatically not normal. The state’s fiscal situation is disastrous. And we need a new status quo.

Although the budget Gov. Dannel P. Malloy recently released takes a few small steps forward, it does not even begin to address the scale and severity of our state’s problems.

Instead, the governor relies on tactics he’s used in the past — a mixture of small cuts, hoped-for labor concessions, and a tax increase. It’s deja vu all over again — only this time, his tax increase doesn’t show up in the budget, because it’s been cleverly designed to hit homeowners at the local level.

Since 2011, Connecticut taxpayers have grown accustomed to being whacked around like a ping pong ball. First, they were hit with the income tax paddle in 2011. Next, it was the corporate tax paddle in 2015. And now, it’s the property tax paddle.

The taxpayer gets slammed while the structural problems underlying Connecticut’s fiscal crisis remain unaddressed; the can is kicked down the road once more.

Promised labor savings have failed to materialize in the past. This year, union and government elites should agree to real reforms that mean real savings — and with real consequences if the savings once again fail to show up.

This year, let’s finally break the cycle. Lawmakers need a more sound approach for how Connecticut spends its money, as set forth in our newest policy brief, Back on Track: Budget Reforms for the Long Run.

First, it is time for the state to fully enact the constitutional spending cap. It has been 25 years since the public overwhelmingly voted in favor of the cap, but lawmakers have never voted to implement it fully.

Second, it’s time for priority-based budgeting. Rather than simply adding to this year’s spending levels, lawmakers should effectively start from scratch, and build a budget based on the state’s top priorities. Fund those items first, then cut everywhere else. It’s plain common sense, and Washington State used this approach to close a multi-billion dollar budget gap.

Third, Connecticut continues to borrow although it no longer can afford to. Our state now has the highest bonded debt per capita in the nation, and the secondhighest pension liabilities.

Lawmakers must freeze state borrowing, and dramatically reform pensions for both state employees and teachers. The goal is to provide retirement security for our public employees — but with a system that also ensures fiscal security for everyone else.

And state employee compensation realignment can’t end with pensions, either. The idea that state employees get great benefits because they are underpaid is at odds with reality. Not only do Connecticut’s state employees earn more than the private sector, they even outearn government workers in surrounding states. The average state employee salary here is $10,000 higher than the average salary in Massachusetts, and $5,000 higher than the average in New York.

Certainly, none of these changes will be easy. But the alternative is unthinkable: an increasingly restless and unhappy electorate looking on in horror as their elected representatives orchestrate the slow decline of a once-thriving state.

Although the road before us is difficult, there can be no doubt that Connecticut is worth every ounce of the struggle that real reform will require. With respect, we ask our lawmakers to dig deeper and do things differently than they’ve been done in the past. It will require hard work, pain, and sacrifice on everyone’s part — but it is the only way we can save Connecticut. Let’s do it — together.