The people of Connecticut deserve better than what has happened to our state’s fiscal condition. The most recent news of the depleted surplus is both disturbing and reflective of our unhealthy economy – a financial environment where poor decisions have lasting impacts.
As of April 1, state officials predicted Connecticut would have a surplus of over $500 million this year. But we now know the truth. Surplus predictions have plummeted to less than $50 million, and our fiscal future looks grim.
Consensus revenue changes released yesterday by Connecticut’s nonpartisan Office of Fiscal Analysis (OFA) and the Office of Policy and Management (OPM) have fallen dramatically, leaving the state with a projected FY2014 surplus of only $43.4 million. This is a reduction of $461.5 million from the January consensus estimates.
The sharp decrease in the projected surplus highlights the poor planning and wishful thinking that went into the governor’s budget. When it comes to fiscal planning, we have to be realistic and smart about the way we use state funds. The governor’s budget exaggerated the health of our economy, with truly egregious misrepresentations.
If all these gimmicks, one-time revenue sources and bonding were removed from the budget, the state would see an even more overwhelming and debilitating deficit of almost $1 billion.
This deceptive math created an illusion of fiscal stability that was celebrated frivolously. As real numbers begin to materialize, we see the truth. Connecticut is in trouble, and the majority party’s approach to the budget was never viable.
In addition to the loss of revenue this year, new projections for future years show a deficit of $94 million with the enacted Fiscal Year 2015 budget. If the Democratic budget adjustments passed out of the Appropriations Committee in April move forward, that would increase the 2015 deficit to $285 million.
It is devastating to see these numbers, yet not surprising.
We are stuck in a cycle of bad policy. Budget predictions were so off because people refused to see the truth. Income tax collections came in shockingly low this year because, I believe, there are fewer taxpayers in Connecticut today. As an increasing amount of people choose to leave the state to find opportunities elsewhere, tax revenue will continue to decrease. On the other hand, many people who have stayed in Connecticut are struggling to maintain their incomes. Unemployment is high, the economy is weak and tax revenues are down.
Time is running out for Connecticut. We are just days away from our deadline to recognize a budget solution, and our fiscal health and economic future are in jeopardy. In addition, the burdens that impact families and businesses persist.
I hope that in the next few days we can work across the aisle to pass a budget that truly provides relief for the people of Connecticut and implements more responsible state spending. We cannot base our budget on wishful thinking; we must be realistic to be effective.
Sen. L. Scott Frantz (www.senatorfrantz.com), a Greenwich resident, represents the 36th Senatorial District, which includes Greenwich, New Canaan and Stamford. He is ranking member of the Finance, Revenue and Bonding Committee and Commerce Committee.