Honoring hard-earned budget lessons

Connecticut’s budget process is at a crossroads, and to avoid mistakes, government needs to remember history. The historian-philosopher George Santayana had it right: “Those who cannot remember the past are condemned to repeat it.”

Though Gov. Ned Lamont was not in office during the Great Recession and the fiscal reforms that came out of that economic calamity, he has certainly learned from them. His proposed budget reflects the spirit of that painstakingly crafted 2017 bipartisan budget which created the fiscal guardrails that the House and Senate recently, and wisely, extended. But these guardrails are only as good as the driver in the vehicle.

In 2009, Connecticut faced a fiscal chasm mainly caused by a rapid decline of 25 percent tax revenue from stock market earnings. This decline led to an analysis of Connecticut’s revenue: Our state’s vulnerability was exposed due to the over reliance on the stock market.

Over the next several years, the Finance Committee took up several bills

HB 5340 (2013), SB 449 (2014), and SB 1135 (2015) trying to address the issue. Republicans expressed concerns over analyzing our income taxes for fear that Democrats would impose additional taxes on capital gains. For 25 years the Democrats refused to actually define the spending cap that came out of the brutal income tax fight of 1991 for fear that government programs would be overly restricted.

It wasn’t until the 2017 budget stalemate and close numbers in the House and Senate that forced Republicans and Democrats into a room to negotiate a budget. The goal of those negotiations was not to just balance a two-year budget, but rather to change the direction for the state. We wanted to reduce our unfunded liabilities and break the historic tax and spend cycle that had become the norm for a decade. Capping our budget income and reserving the “volatile” income to pay down our unfunded liabilities began that process.

The ultimate intent of these caps, however, is to reduce our unfunded liabilities in order to reduce debt service and make pension payments so residents can be relieved of the title of living in the highest tax state. By proposing to reduce the income tax burden on our middle and lower class residents — the governor’s plan slashes middle and upper income brackets 10 percent, and 33 percent on lower income earners — Gov. Lamont is honoring the spirit of these caps. Legislative Democrats must refrain from the temptation of spending this year’s surplus on next year’s programs, and join Gov. Lamont by lightening the tax burden on Connecticut residents.