During the last gubernatorial campaign, each side claimed that they had a deeper commitment to fiscal responsibility and government transparency.
Now more than two and a half years later we are further away from both concepts than most people could have possibly conceived of.
In an announcement that will come as no surprise to Wait, What? readers, a report by the Fiscal Policy Center, which is part of Connecticut Voices for Children has determined that we should consider changing our state song from Yankee Doodle Dandy to Bob Dylan’s famous ballad, “It’s Alright, Ma (I’m Only Bleeding).”
The non-partisan Fiscal Policy Center concludes;
“By relying on borrowing and one-time fixes, we’re undermining the long-term stability of the budget and gambling with these investments in our children’s future.”
The reported on the state budget that was proposed by Governor Malloy and approved by the Connecticut General Assembly “warns that the ‘quick-fix’ budget solutions adopted in the budget will deepen the state’s long-term budget deficit and could ultimately endanger funding for child and family services.”
The report goes on to explain that the new budget uses borrowing, one-time revenues, and fund transfers to close budget deficits and cover operating expenses and reports that, “ By relying on these measures, rather than recurring revenues to close the state’s budget gap…state policymakers have opened up a larger revenue hole in future budget years.”
Key problems about Connecticut’s state budget that highlighted in the new report include:
- The new state budget “relies on almost $600 million in borrowing, over $400 million in temporary fund transfers, and $500 million in one-time revenues to pay for operating expenses. Because these funding sources will dry up at the end of the two-year budget, there is currently a projected state deficit of $712 million in Fiscal Year 2016 and comparable holes in 2017 to 2018.”
- “Reliance on debt and one-time revenues will further increase budget risks for the state if economic growth does not return quickly. The state’s budget projections assume that robust economic growth will result in increased state tax revenues. With a nearly empty Rainy Day reserve fund, if this growth does not emerge, Connecticut would have little choice but to turn immediately to deep cuts, steep tax increases, and more borrowing.”
- “The state government has transformed over $1 billion in debt it owed itself and its employees into debt it now owes to bondholders, resulting in less flexibility and control of the repayment of that debt. While the state budget plan pays down funds owed to the state employee and teacher pension systems, it does so by borrowing money from private bondholders. In addition, the state has borrowed money from the private market to meet stricter accounting requirements under the rules of Generally Accepted Accounting Principles (GAAP).”
You can find the full report, entitled “A Gambler’s Budget: the Fiscal Year 2014-15 State Budget,” at www.ctvoices.org.