Con­necti­cut’s dire bud­get prob­lems re­quire a new ap­proach

The Register Citizen (Torrington, CT) - - OPINION - By Carol Platt Liebau Carol Platt Liebau is pres­i­dent of the Hart­ford-based Yan­kee In­sti­tute, Con­necti­cut’s freemar­ket think tank.

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 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, hope­d­for 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 sec­ond-high­est 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.

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