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Sen. Toni Boucher: ‘Sounding the Alarm Bell’ – Summary of the Dire Situation of the State of Connecticut’s Finances

Report by Paula Antolini
April 30, 2017 5:33PM EDT

 

 

 

Sen. Toni Boucher: ‘Sounding the Alarm Bell’ – Summary of the Dire Situation of the State of Connecticut’s Finances

Op-ed by Senator Toni Boucher

 

“Sounding the Alarm Bell” by State Senator Toni Boucher, Vice Chairman of the Finance Revenue and Bonding Committee

 

You may have heard that legislative Republicans presented a balanced, no-tax-increase budget for the next two years. Out proposal puts more money into education funding and does not push the state’s burdens onto municipalities.

 

Unfortunately, while Republicans were developing our plan, state tax collections took a nosedive. This is dire news. My Republican colleagues and I have warned that higher taxes are pushing people and businesses out of our state. We are one of the few states seeing a year-after-year decline in population. When Connecticut lost GE, it just didn’t lose a corporation; it lost the well-paid employees who worked there.

 

One of our constituents from the 26th senate district contacted me to sound the “alarm bell.” Below he accurately –:

  • Connecticut State income tax collections are falling $450 million below projections
  • Connecticut state income tax projections for the next fiscal year (beginning July 1) have been slashed by $500 million. The budget deficit will exceed $2.2 BILLION.
  • Connecticut state income tax projections for the following fiscal year (beginning July 1, 2018) have been also been reduced by $600 million. The budget deficit for that year is projected to be $2.5 BILLION.
  • The combined Connecticut State budget covering the next 2 years is now projected to run a $4.7 BILLION deficit.
  • As dictated by state law, Governor Malloy must balance the current budget that is now projected to run a $500 million deficit-ends June 30th.
  • Governor Malloy plans to use all of the money currently in the Rainy Day fund ($235M) and will probably borrow an additional $250M+ to balance this year’s budget ending June 30, 2017. 

 

Connecticut taxpayers now face a huge tax increase if the Governor and the Democratic leadership in Hartford refuse to reform the existing state employee pension and medical plans. There is no way out of the fiscal crisis without significant cuts to budget expenses and/or large tax increases.

 

After two historic Connecticut state tax increases in the last six years, and the decision by the Governor and Democratic leadership to burden taxpayers with an additional $14 BILLION in State employee pension costs, it is clear businesses and residents will continue to leave the state.

 

This is why the Republican budget proposal is so important. It provides us with a starting point for dealing with the new revenue shortfalls by clearly identifying our most important priorities. I am glad to say education funding tops that list. Our budget includes a fully revised Education Cost Sharing Formula that dedicates $33.6 million more in funding in fiscal year 2018 and $136.6 million more in fiscal year 2019. In 2018 all towns and cities will either be held harmless or gain more funding for education needs.

 

Another important measure in our proposed budget creates stability for municipalities by rejecting the administration’s proposal to make them pay a portion of the Teacher’s Retirement Fund and it provides communities with the same funding in fiscal 2018 that they received in 2017. We also propose mandate relief that will help towns manage their budgets and identify savings.

 

Our budget proposal isn’t all about spending; in fact, the only way to stop the steady stream of budget deficits is to get state spending under control. Not everyone will be happy with the measures proposed, but if we don’t start this process, the deficits and revenue returns will only get more dismal.

 

Some of the spending controls we propose are:

  • Enacting a Constitutional Spending Cap
  • Enacting a Constitutional Transportation Lockbox
  • Capping bonding allocations and issuances at $2 billion,
  • Streamlining state agencies by combining services like human resources, information technology, etc.
  • Eliminating the Citizens Election Fund
  • Require UConn Health Center to see private partnerships
  • Apply “Results First” to all grant programs

 

More savings need to be found to deal with the reduced revenue numbers and how that will impact future budgets, but I believe our proposal provides a good starting point. Above all, we must realize that the continual search for new sources of revenue intensifies the downward pressure on our economy. Learning to live within our means is the only way to spur growth and return our state to prosperity.

 

Senator Boucher represents the communities of the 26th State Senator District: Bethel, New Canaan, Redding, Ridgefield, Weston, Westport, and Wilton.

 

 

 

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