As Republicans predicted during all the budget debates of this past year, Connecticut’s financial house is not in order and continues to struggle with an unbalanced budget. On the revenue side, tax receipts are down in every category: whether they are sales, income, gasoline or estate taxes as well as slot machine revenue Connecticut receives from its two casinos. On the spending side, four months into this fiscal year, the state has already overspent in its health and human service accounts. More families are struggling to pay doctor bills and if they qualify, are signing up for state programs like, HUSKY and Medicaid.
We are disappointed in not using foresight to expect these needs in tough times so as to compensate for them with cutbacks in other accounts.
Not one of the suggestions put forth by the Republicans to balance the state’s budget during the budget discussions was seriously considered by the majority party’s adopted budget on August 31st. In fact, Republicans warned members on the House floor how revenues would not return to “normal” by increasing income taxes on the wealthy and businesses.
Currently, 1% of Connecticut’s taxpayers are responsible for 40% of Connecticut’s income tax revenue. This over-reliance on the 1% is particularly felt when this group runs into financial problems or decides to leave the state. Subsequently, their decreased tax payments are immediately reflected in the state’s revenue picture. As for businesses, Connecticut is ranked fifth as the least friendly business state. We’re not growing jobs, we are losing them, to the tune of some 90,000 since this recession began. Since January 9,545 businesses have closed. Unemployment stands at 8.4%, and the state reported losing 6,600 jobs in September alone.
What is growing is Connecticut’s expenditure problem.
In July 2008, the budget deficit estimate was $150 million. Nothing was done and, by November, the deficit estimate had climbed to $392 million.
At the beginning of 2009, the majority party proposed token budget mitigation packages, minor tweaks. Legislative Republicans urged the General Assembly to come together to restructure state government and make significant cuts in spending. Our plea was rejected, resulting in a $950 million budget deficit in July.
Comptroller Nancy Wyman projects the deficit for this fiscal year to be $624 million, growing by an estimated $1.7 million each day. Moody’s has downgraded Connecticut’s bond rating outlook from “stable” to “negative,” citing poor choices made to cover the state’s budget deficits. This was a point Republicans made during the session, again, to no avail.
The buck has been passed long enough.
Connecticut, along with many other states, has a very real budget problem. The state has taxed all it can tax and borrowed all it can borrow. One shot revenue streams have dried up.
Now is the time to come together in special session, restructure government and make meaningful cuts to bloated state spending. We are ready, willing and able to work on bi-partisan solutions.
The time for leadership is now.