Getting ahead of Connecticut’s next state deficit
We have a state budget! But we’re not nearly out of the woods yet. A new round of projected deficits is just over the horizon, and if prompt and substantial action isn’t taken, we’ll go through this again, and again.
There is surely some good news in what was achieved in the bipartisan budget agreement. But it’s barely a toe in the water. We need to really dive in if we are to calm the waters for more than just a few months.
The budget creates a Commission on Fiscal Stability and Economic Growth to develop and recommend polices to achieve government fiscal stability and promote economic growth and competitiveness within the state. A noble undertaking, all to be done by March 1, 2018. This is an important step forward.
Let’s take full advantage of the opportunity the Commission could provide, with a full court press in a new direction.
Here’s what we know:
• The Legislature’s Office of Fiscal Analysis has determined that the deficit will be $4.6 billion over the two years of the next budget. We need to get ahead of that. The current balkanized process by which our budget is developed, and then considered by the Legislature has to be changed.
• Starting with executive branch agency submissions, and then moving through a series of Appropriations subcommittees on the spending side and the Finance Committee on the revenue side, is it really surprising that we are not getting strategic goals and desired population level outcomes? It’s too disjointed for too many steps of the process. The disconnect is evident and detrimental.
Here’s what we need to do about it:
• This Commission should start with the public’s input as reported in a just-released InformCT Survey. InformCT is a public-private partnership that provides independent, non-partisan research, analysis, and public outreach to help create fact-based dialogue and action in Connecticut. Anticipating the need to set priorities, the survey, administered by researchers from the Connecticut Economic Resource Center, Inc. and Smith & Company, asked a random sample of 505 residents across Connecticut to indicate “how important it is for the state to spend our money” on various policies, using a 5-point scale, from very important to not important. The issue that received the highest rating among the respondents was health and safety, followed by the achievement and security of children, the environment, and workforce/economic vitality.
• It should then allocate the revenue we know we have available to those priorities. If we then believe that there are unmet needs that cannot be covered within the revenues currently available, then they should propose a five-year phase in on how we intend to raise the revenue to cover unfunded priorities.
• State leaders should also get a better understanding of who currently pays what taxes, to determine if they believe there is a fair distribution of the costs of government across individuals and businesses. This can be done by updating the Tax Incidence Study conducted in 2015.
An inclusive, data rich approach to our state budget, setting clear priorities and measured by population outcomes can be the goal of our actions. This means better results and outcomes for our residents.
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