When he released his budget back in February, Gov. Dannel Malloy announced what sounded like a simple accounting change: Connecticut would no longer use “current services” estimates when building its budget each year. The change may sound technical, but it has a real, harmful effect on funding for state programs that serve children and families.
Current services estimates are a budgeting best practice that helps us account for routine changes like inflation and caseload adjustments. Here’s how it works: each year, when crafting a budget, state officials use the previous year’s spending as a baseline. Then, policymakers adjust that spending for how much it will cost to provide the same level of services this year, given more people on the program or cost increases.
For a hypothetical example, say it cost $10 million in 2015 to provide developmental disability services for Connecticut families. In 2016, more families need those services, and inflation has raised the cost of providing services, so it costs a little more to keep offering the program — say, $2 million more. The new baseline for the program is the previous cost ($10 million) plus current services changes ($2 million), totaling $12 million.
In other words, current services estimates tell us how much Connecticut would have to spend on a given program — developmental disability services for family, economic development assistance for businesses, health care for children — in order to maintain the program at its current level, in the absence of any policy changes. This has helped policymakers and the public compare spending year over year and track how budgets affect the programs and services we care about.
Current services are critical for budget transparency and accountability because they provide an honest assessment of what our budget really does and help us hold elected officials accountable for those changes.
Unfortunately, Gov. Malloy has abandoned current services in favor of what he calls “zero-based budgeting.” Under this paradigm, the state doesn’t account for the growing cost of providing programs. Rather, policymakers will simply use the previous spending each year as the budget baseline each year.
Returning to our earlier example, this means the baseline for developmental disability services would not factor in inflation, or caseload increases. Instead, the 2016 baseline would be the same as in 2015, $10 million, even though that means Connecticut could not provide the same level of services to families in need. What’s more, without current services estimates, we have no way of knowing just how much need has grown — whether it’s $2 million or $20 million.
This change makes it easier for Malloy to govern – abandoning current services washes away hundreds of millions in red ink in the coming years. But the cost of doing so is ignoring rising need: children who need good schools, parents who need comprehensive health care, families who need supportive housing.
Our leaders must restore current services estimates to ensure that our state budget includes an honest assessment of Connecticut’s needs. If we don’t, we’re merely hiding from the problem — and children and families will pay the price.
Ellen Shemitz is the Executive Director and Nick DeFiesta an Associate Fiscal Policy Fellow at Connecticut Voices for Children.