The legislature is rushing toward a scheduled adjournment next Wednesday, but it is not clear lawmakers will finish their work on the state budget by then.

In recent years, the legislature has looked at June 30, the last day of the fiscal year, as the real deadline for getting a budget together. The wrangling over state spending and tax policy comes as the business community continues to send signals, directly and by openly looking toward other jurisdictions, that Connecticut needs to commit to a long-term fiscal policy that provides consistency.

Union Deal

The Malloy administration and state employee unions have come to an agreement on a concession package both sides say can save the state approximately $1.5 billion over the next two years. It still must be approved by union rank and file.


Turning Point?

Governor Malloy and state employee unions are reportedly close to a tentative deal that could dramatically reduce the size of the budget shortfall the state faces over the next two years. But questions remain over whether accepting proposed union concessions now come at too high a price. Some are concerned part of the agreement locks the state in to a contract it may not be able to afford long-term.


CT21 Cites Savings Potential

The Connecticut Institute for the 21st Century is offering updated data which shows there is still the potential to reduce costs by up to $2 billion, over the next five years, if previously proposed reforms from CT21 are fully implemented across state government.

Jobless Rate

Top economists in Connecticut are warning that April's uptick in the unemployment rate should be taken as a warning sign by state lawmakers. Connecticut continues to lag the region in job creation and that may be a sign of deeper fundamental problems that begin with state policies that are seen as unstable by many in the business community.


Negotiations Underway

With less than four weeks to go in the regular legislative session, Governor Malloy is reviewing budget proposals presented to him by legislative leaders. At the same time, Malloy is engaged in last minute negotiations to extract concessions from state employee labor unions.


Why GE Moved

An important interview has been published by the Wall St. Journal for those still trying to understand the business decision by General Electric to move its headquarters from Fairfield to Boston. More than any other development in recent years, the GE move is still cited by many as a major event that had an outsized impact on perceptions of Connecticut.


Budget Battle

The governor and legislative Democrats and Republicans have publicly shared some of their plans for balancing the next two year budget.


CT21 Reforms Could Save Millions

The Connecticut Institute for the 21st Century is offering a new analysis of its previous policy reform suggestions as the legislature grapples with the current budget crisis. Updated data shows there is still the potential to reduce costs by up to $2 billion, over the next five years, if previously proposed reforms from CT21 are fully implemented across state government.

Signs of Hope

There is little good budget news coming out of the state capitol this week, but there are signs that the dwindling lack of options is forcing the governor and lawmakers to consider approaching this year's challenge with long-term reform in mind.

Thursday, the bi-partisan leadership of the House pledged to work together to think in terms of "years [ahead] and future generations" when it comes to crafting the next two-year budget and Governor Malloy pledged not to resort to borrowing to close the $5 billion budget gap. If that thinking holds - it may afford Connecticut an opportunity to take a first step toward a more sustainable budget process and a stronger economic footing.


Options Limited

A plan by Governor Malloy to close the gap in this fiscal year's budget takes many options off the table - including use of the Rainy Day Fund - as lawmakers try to tackle the challenges presented by budget shortfalls in the next two years.

With less than a month to go in the current legislative session work has barely begun on addressing a potential budget imbalance of $5 billion or more.

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Good and Bad News

Another economic ranking lists Connecticut as one of the worst places to do business, this according to Stamford based Chief Executive Magazine. But the same ranking says among Connecticut's attributes are quality of life and the quality of the workforce.


Deadline Pressure

Facing a shortfall of more than $5 billion over two years, state lawmakers are moving into the final weeks of this year's legislative session with no clear direction about how to close the gap.


Economic Survey

A new survey of 500 Connecticut residents on the economic mood of the state shows both positive outlook and worrisome concern.

In general, respondents to the poll see reason for optimism, but also hold the view more needs to be done to make the state more friendly to job growth.


Rail Investment

While the state legislature focuses on the next two year budget, decisions being made over the next five weeks could have long term implications when it comes to where and how Connecticut chooses to invest in infrastructure improvements.

A new report issued by the transportation department suggests spending millions to update freight rail in central Connecticut could have benefits for the regional economy.


Budget Options Dwindling

Governor Dannel Malloy is warning of more than 4,000 state employee layoffs if state employee unions can't help him find $700 million in savings in the next two year budget. Talks are continuing, but Malloy warned unions Tuesday that there needs to be a sign of progress soon. The governor has proven in the past he is willing to resort to layoffs when necessary.

Meanwhile, the Speaker of the House is signaling a need for tax increases. With a budget shortfall topping $4 billion the speaker says it would be almost impossible to balance the budget without added revenue.

The legislature is scheduled to adjourn June 7th, but on-time completion of a budget is looking less likely with each passing day.

Full Time Legislature?

The influential Hartford Business Journal editorial page says last week's dysfunction at the state capitol on budget matters shows it is time to move toward a full-time legislature in Connecticut. The paper argues part-time lawmakers simply don't have the expertise it takes to run our state government.


Mini Analysis

Next week Governor Malloy and legislative leaders from both parties are scheduled to sit down to talk about an expanding state budget crisis.

This is not the usual end of session bargaining to bring the year's budget debate to a close. The meeting comes as income tax revenues to the state are falling unpredictably and the projected budget shortfall for the next two years is flooding over $4 billion. This week the legislature's Appropriations Committee failed to come to an agreement on a spending plan, Republicans offered a plan that appears to be out of balance, the Finance Committee agreed to the seemingly unrealistic goal of no new taxes and the governor's budget office ordered a hiring freeze.

Governor Malloy's own budget proposal, three months after its unveiling, is also out of balance based on the latest revenue figures.

All this is happening as the race for governor begins to take shape and the margins in the House and Senate suggest Republicans have an opportunity to actually win control of the legislature in the next round of elections.

To solve the current budget crisis lawmakers and the governor will have to make politically unpopular decisions, which will almost certainly include spending cuts and tax increases. While a June 7th resolution seems unlikely, delaying a final deal until later this year - in special session - will not make the choices any easier. It is possible the magnitude of the problem may force many lawmakers to vote for a budget deal they don't like and then decide not to seek re-election. 

Tax Summit

It is the time of year when the governor and legislative leaders would normally meet to begin final negotiations on the budget, but eroding tax revenues have prompted a call from the governor for an emergency, bi-partisan summit.

Falling tax receipts are putting new pressure on an already difficult situation.



Sign of Trouble

The legislature's Appropriations Committee failed Tuesday to pass a proposed spending plan for the next two years. The failure maybe a sign of things to come as a closely divided legislature tries to balance the state budget by June 7. Perhaps more important, the failure maybe a sign the legislature is unable to act with long term solutions in mind.


CT21 Urges Defense Workforce Development

By Loren Dealy Mahler

Economics 101 tells us that job creation leads to long-term growth, and any talk about improving the economy always centers on jobs. What we don’t often discuss, however, is what happens when there are more jobs than there are workers to fill them. When jobs go unfilled the economic benefit of creating them sits unclaimed.

Connecticut is on the verge of experiencing this rare situation. A glut of jobs in the manufacturing industry is headed our way, but if we don’t make the right investments now, the opportunity will be wasted.

Homeless Programs Working

Working in coordination with state government, non-profit groups like the Connecticut Coalition to End Homelessness have successfully reduced the homeless population in Connecticut, in the last five years, saving lives and tax dollars.

The state’s homeless population is estimated at about 10,000 people which represents a five year low. Efforts to reduce the homeless population are consistent with principles promoted by the Connecticut Institute for the 21st Century, because they tend to reduce the burden on taxpayers while improving the outcomes for the people receiving the benefit of state services.

Group Plan on Hold

A plan to privatize social services for the developmentally disabled has been put on hold and it appears the issue may have become part of the negotiations between the Malloy administration and state employee unions. Privatization of social services across government is believed to lower costs and improve outcomes in a variety of areas. Previous CT21 studies have confirmed better results at lower cost.


Budget Season Mini Analysis

As the legislature's budget writing committees move toward their deadlines to produce spending and tax packages, the pace is picking up at the state capitol. Rumors persist that the tough decisions that need to be made this year to bring the budget into balance may force the legislature into summer session.

Thursday Governor Malloy warned state labor unions and the employees they represent that he is prepared to layoff as many as 1,100 state workers in May, and leave more than 100 other positions unfilled, unless labor agrees to significant cost cutting concessions.

All this is taking place against a backdrop of the 2018 race for governor as new candidates step forward each day.