I continue to remain optimistic about Connecticut’s enormous economic potential.
Take a look at the base industries in Connecticut, from manufacturing, financial services, and research, to bioscience.
We have a mix of industries that is the envy of any state in the U.S. and any country in the world. We are sitting on a generation’s worth of work and growth.
Unfortunately, we cannot reach that economic potential when we’re currently facing a billion dollar-plus budget deficit.
The largest contributors to this deficit are the undefined constitutional spending cap, unfunded liabilities of the state employees’ pension system, and ballooned spending in the long-term care and corrections systems.
The original spending cap, passed in 1991, was a mechanism that worked with the proper safety valves.
Over the years, however, the legislature has weakened the cap by exempting entire categories of state spending.
The cap needs to be tightened. A strong, fair spending cap definition must be put before the new legislature to be voted on.
I give kudos to the Governor for refinancing the current unfunded pension liabilities to make payments more stable into the future.
Now, the state employee unions have to come back to the table, and deal with the size and magnitude of this accumulated problem.
If re-negotiations are resisted, the state will be forced to find money in other ways, which could result in more state employee layoffs and cut costs of essential services.
Another pragmatic solution is to increase job growth and revenue to afford funneling more payments into the system.
Home- and community-based care is preferred among many residents I’ve spoken to, and can save the client thousands of dollars and the state millions, all the while still receiving quality healthcare with an increase in personal independence.
Connecticut’s nonprofit human service providers are willing and able to partner with the state to fill this need.
Reforms to the corrections system can save the state millions of dollars by continuing to reduce the prison population, and encouraging prisoners to enter workforce development programs so they can transition back into civil society with a job and a newfound purpose.
Right now, the economy is job one for the Governor and the legislature.
We need to create more opportunities for our people and find places in which to unburden them from debts of the past.
We have become a target for companies and folks alike to move away from. We operate in a highly competitive environment, not just nationally, but globally.
We need to remain at the top of our game.
The way we’ve always done things may not be the way we always need to, or should do, moving forward.
Connecticut is hungry for a new path.
Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.