State facing $2 billion annual structural deficits next two years

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No matter who becomes our next governor or which party controls the legislature at the state capitol in Hartford, they will have their work cut out for them. While the bipartisan two-year state budget passed last year made some progress in helping to flatten the cost curve going forward, it is still the case that there are anticipated structural deficits of $2 billion and $2.6 billion respectively in the upcoming two fiscal years that will significantly test the mettle of state legislators and the executive branch. Their ability to get the state on a more solid fiscal footing will make all the difference in our state’s ability to see growth instead of exodus and in being able to meet the needs of those who need it the most, instead of simply dumping more and more money into voter blocs to the detriment of the state and we the taxpayers.

Forty years ago Connecticut was highly ranked in fiscal health as opposed to now being consistently near the bottom amongst the 50 states. In the past 25 years Connecticut has repeatedly been one of the last states to emerge from economic recessions. Even now the majority of the states are seeing more growth in their economies than Connecticut. There is something wrong with this picture and it has to do in large part with policies of state government and the ballooning of state spending and taxation that have resulted in business and taxpayers leaving Connecticut for states that are friendlier to job providers and people.

Over the past couple decades Connecticut has had governors from both parties but one party rule in the legislature, and it is the legislature that comes up with the budget and raises taxes. The governor initiates the process by submitting a budget proposal in February, but it is the legislature that subsequently produces the fiscal blueprint and submits it to the executive branch. In the end, it is this body that has continued for decades to kick the can down the road in not sufficiently addressing the underlying causes of the built-in structural deficit that not only threaten our fiscal future, but the ability to tackle the real needs of those least able to help themselves.

Only because in the state election two years ago, the state senate has been evenly split and the lower chamber nearly so, has a more balanced long-term fiscal perspective been introduced into the mix. In recent years the Republican leadership at the capitol was generally excluded from budget negotiations, but in this cycle was included, as they had to be, to get a two-year budget passed. Given the urban domination of the Democrat contingent and the pressure exerted by the public sector unions to protect themselves, the best hope for a more balanced approach to state spending and taxation rests on a stronger Republican presence at the Capitol—unless voters want to continue one party Democrat rule and another 20 years of more of the same.

Guarco is chair of Granby’s Board of Finance.