Priority One: Long Term Plan

By Scott Bates

There is one over-riding issue facing Connecticut in the next legislative session. The state budget must be brought into balance and a long-term plan for fiscal sustainability put in place. Our economic security and quality of life depend on it.

Here’s the problem. The latest consensus revenue figures released by the Malloy administration and the legislative budget office indicate the state is facing projected deficits of $600 million over the next two years. The numbers may be much higher than that and could end up exceeding $1 billion. With such a challenge before us, the ability for state government to invest responsibly in new programs to stimulate the economy or improve the job market is greatly curtailed. Simply filling the budget gap to fund existing services will take all the revenue government can raise and more. That’s no way to build an innovation economy needed to capture the high value jobs we want for ourselves and our children.

Red Tide

The challenge of the next legislative session is becoming even more clear in the days following the election.

A new consensus revenue report suggests the state is facing a projected budget shortfall of nearly $600 million over the next two years. Most insiders are already operating under the assumption that the number is already well above $1 billion.

It means that the legislature will not have the luxury to consider means to grow the economy without first bringing the budget into balance to properly pay for existing obligations.


Practical Analysis

With the 2016 legislative elections behind us it appears the state Senate will be evenly divided (18-18) between Democrats and Republicans, giving Lt. Governor Nancy Wyman a key role in breaking ties. In the House of Representatives, Republicans also made gains, picking up eight seats - as of this writing - trimming the Democratic majority to 79-72.

The next session of the legislature will continue to be dominated by debate over the budget and the state's economy. All sides agree that regardless of the on-going dispute over monthly budget deficit projections, Connecticut is facing huge budget shortfalls of $1 billion or more in each of the next two years. A dramatic change in approach is necessary and voters seem to be signaling they want both sides to work together to find solutions.

No Good Choices

The CT Mirror offers a peek at some of the budget cuts being proposed by agency leaders as the Malloy administration begins the process of putting together a budget proposal for the next two years.


CT Economic Ranking

A state report on the Connecticut economy shows "room for improvement."

The Connecticut Economic Digest puts our state at 38th among the 50 states in terms of the overall economy. With state government struggling to keep annual budgets in balance there is little room for policy changes aimed at improving the overall climate.


The Real Issue

While elected leaders debate over the size of the projected budget deficit during this campaign season, it is important for Connecticut to keep its eye on the ball. Monthly projections are not as important as the overall fiscal health of the state. All agree the state currently faces budget shortfalls of one billion dollars or more over the next two years.

As the Commission on Economic Competitiveness pointed out in its first report, the fundamentals of the Connecticut budget are so challenging that we could be facing a cycle of deficits and difficult choices on spending and taxes for years to come. Monthly deficit projections need to be accurate, but they are only a symptom of a problem that needs to be addressed from a long term perspective.


CT Climbs

A new survey from the Milken Institute says Connecticut is improving its position as a place that is able to convert high technology opportunities into new companies with the ability to add jobs.


Deficit Debate

As the election approaches, the administration of Governor Malloy and Republican legislators are taking part in a very public spat over the size of the state's projected budget deficit. All sides know the state is facing substantial shortfalls for the foreseeable future, so the real focus of debate should not be on the size of the problem, but how to address it long term.


Substantial Headwinds

The departure of General Electric and budget strains being felt at the local and state level continue to hamper the outlook for the Connecticut economy. This as the governor and legislature engage in an on-going debate over the size of the projected budget deficit.


Deficit Numbers

A week of argument over the size of the projected state budget deficit largely misses the point.

The facts are; nearly everyone at the state capitol views the current state budget as being more than $1billion out of balance this year with a gap of about the same margin in the following fiscal year. Privately, lawmakers will say they expect the gap to be even than that.

It all means that regardless of the monthly projections, the state is still facing financial challenges and a new approach focused on trimming spending and building a tax structure to support agreed on spending levels is needed.


Early Signs, Continued Turmoil

The Malloy administration is asking its agency leaders to put together budget proposals for the next two years that contemplate cuts of as much as 10%.

This is an early sign that the administration expects a period of continued high demand for government services with no revenue source strong enough to consistently meet that demand.


Better Policies Needed

In its weekly editorial, the Hartford Business Journal lauds the state for securing long-term employment at Sikorsky, but argues "corporate welfare" is not the best policy when it comes to sustaining economic growth.


CT Scores on Energy Efficiency

A new report from American Council for An Energy-Efficient Economy says Connecticut is doing well in the category.

Connecticut, with its first in the nation Green Bank, got very high scores for use of government policy to influence energy efficiency and ranked number five overall across all categories.

ACEEE says Connecticut government leadership "is committed" to improving the state's economy through the promotion and practice of new energy policies.

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Manufacturing Workers Needed

Despite strong efforts to provide programs to train students with the skills necessary for modern manufacturing, some leaders in the sector say Connecticut manufacturers are not finding enough millennial generation employees to fill out their payrolls.

The issue was discussed at a forum put on by UConn in Wallingford earlier this week.


Digital Government

The Center for Digital Government says Connecticut is doing a better job using technology to deliver government services. The group gives Connecticut a B+ grade in an area that can help drive down costs while improving efficiencies.


Efficiency Task Force

Nearly a year after it was authorized, a government efficiency task force created by the legislature now has all its members in place and can begin work.

The task force is supposed to study how government services are delivered and determine whether there are more efficient ways to do so with an aim toward saving money.


Economic Growth Not Cuts Alone

By Chip Beckett

It is time to consider specifics when discussing regionalism and the Connecticut economy.

Our state, and the Hartford region in particular, is in an especially unhappy mood. Residents expect government services, but feel they are often of poor quality. Taxpayers feel stretched financially, but there is always a concern government may ask for more. As a state, we have lagged socially, culturally, and economically for a generation. We are among the slowest growing regions in the country according to a recent report called MetroHartford Progress Points from the Hartford Foundation for Public Giving. The only way to break the cycle is to grow our economy by creating jobs.

CT Debt Burden

A new study out this week says Connecticut is one of dozens of states with a debt burden higher than the state's ability to pay. It means that if Connecticut were to attempt to pay off its debt it would cost each of us almost $50,000.

The study can be used as argument for taking steps to control debt specifically and the cost of government in general.


Still Fighting on Spending Cap

Twenty-five years on, Connecticut is still struggling to define the terms of a constitutional cap on spending approved by the voters in a referendum.

At a recent meeting of the Spending Cap commission, Jim Smith, CEO of Webster Bank, said defining the terms of the cap and living within spending constraints is a key to a robust economic recovery. Smith says lack of confidence in state government's ability to control spending is holding Connecticut back.


Good and Not So Good

The latest report from the U.S. Census Bureau says Connecticut has among the lowest poverty rates in the country with a rising median income. At the same time there is evidence the Connecticut economy is not good for recent graduates with more than 40% of 18-34 year olds still living at home with their parents.


Appeal for Solutions

The state will appeal a controversial decision announced last week by a Superior Court judge that declared Connecticut's system of school funding "irrational."

Despite the appeal, the expensive challenge of school funding has now been put front and center on the legislative agenda for next year. In announcing the state appeal, Attorney General George Jepsen said the legal battle should not prevent the legislature from addressing the legitimate issues concerning how to pay for public education in Connecticut.


Highly Cited

The annual survey of members by the Connecticut Business and Industry Association includes some positive indicators and some troubling findings.

The report, released at the end of last week, says business profitability is up in Connecticut, but at the same time more than 25% of business owners say they are at least considering moving some operations out of state and nine in ten think state government is doing nothing to help make Connecticut a better place to do business.


More Spending Pressure

Although the court ruling did not specifically set new spending levels, a superior court decision on a major school funding case will put new pressure on the legislature in the coming session.

The court ruled the state's system of funding local schools is "irrational" and ordered a fix by early next year. Municipal leaders, who feel the state often short changes cities and towns on education funding are celebrating the decision.


New Report Low Wage Jobs

A new report from Connecticut Voices for Children supports some of the recent findings of the Connecticut Commission on Economic Competitiveness.

Low wage jobs are increasing in Connecticut and high wage jobs are decreasing. Setting aside the obvious effects on families, this is a trend that also has a direct effect on the ability of state government to provide services since low wage workers pay fewer or no taxes.