The Governor came out with her recommended budget this week surprising many people with some of her bold proposals. One striking element is that Governor Rell is proposing no tax increases in her budget. Regardless how individuals think we should close the large deficit, tax increases really are not an option for two reasons. Increased taxes in a slowing economy with increasing unemployment may only deepen the recession and cause Connecticut to be less competitive for job growth in the long run. Most important, however, is the long term projection of Connecticut’s revenues and expenditures.
The Governor balances her budget, in part, with two pots of money, federal stimulus dollars and “rainy day” fund dollars, which will be completely expended by 2012. Based on projections, Connecticut, therefore, is facing a $1 billion dollar deficit in 2012 from the loss of these two revenue streams alone. In total, 2012′s deficit is projected at over $4.5 billion. If we increase taxes today, we may be looking at a second round of taxes in 2012. Connecticut residents cannot afford multiple rounds of tax increases, and excessive spending must be the first focus of government. Governor Rell’s budget not only attempts to close the deficit in 2010-11, but also looks forward to years beyond where projections show that we cannot sustain excessive government spending.
The Governor proposes budget cuts and transfers approximately $1.2 billion in 2010 and $1.4 billion in 2011. The Governor’s budget eliminates and consolidates 23 state agencies and is targeting union concessions at $275 million per year in 2010 and 2011. She calls for the reduction of 848 state positions, 448 of which are currently vacant.
She calls for an Office of Accountability that is charged with eliminating waste and inefficiency in state agencies. As the Governor began cutting spending, you may recall that she sought for the reduction of state owned-vehicles. She called on agencies to audit their vehicle inventory. As a result, one state agency realized it had thirty vehicles housed in a garage that they did not know about previously. This finding prompted her to create this position which will look for better government efficiencies. At the least, this process has demonstrated the bloated bureaucracy which we must get under control.
The budget also provides a three point plan for municipalities. Municipal aid makes up $2.9 billion of our state budget. The Governor’s budget proposes flat funding these grants. In other words, she has proposed no cuts to town aid including our funds for school education. While many states are cutting aid to cities and towns, I applaud Governor Rell for recognizing that cuts to municipal aid will only translate to higher property taxes for residents, another unacceptable outcome in today’s economic climate. Her budget calls for the retraction and suspension of many costly unfunded mandates on our towns and provides for incentives for towns to regionalize its services as well.
Some lawmakers have been critical of the Governor’s budget because it still leaves a $2.6 billion hole. While this criticism is correct, it only paints a more urgent need to act on spending cuts. When the Governor began her budget process in November, she made certain projections on the financial conditions. These projections continue to worsen. Governor Rell is one of the first people to acknowledge that more tough decision must be made to keep Connecticut on track. I commend her courage in leading the discussion with a budget that attempts to reduce government, but also maintains our key services for our must vulnerable; the elderly, fixed income individuals and children.
Everyone will be able to find budget cuts that concern them, but we all need to recognize that we all most share these sacrifices and work through these tough times together. Partisan politics have no place in these budget discussions, and unquestionably government must reduce its size commiserate with the reduction of our revenue stream. To do anything less will only force our future generations to pay for our mistakes.
The Finance, Revenue and Bonding Committee for which I am ranking member has begun its public hearings to contemplate tax increases and the elimination of certain tax exemptions, such as the sales tax on clothing and groceries. My telephone has already begun ringing with questions and concerns about the detrimental effect of tax increases in this economy. I welcome your input and questions. Please do not hesitate to contact me with your concerns and suggestions. I may be reached at 203-481-4463 or email@example.com. It is with shared concerns and suggestions that will get us through this process together.