After the disastrous budget passed last June, and two special sessions that took small steps to reverse some of the damage, Governor Malloy's latest proposal takes a solid stride down a path to greater fiscal responsibility.

The plan acknowledges that Connecticut has real economic problems: taxes that are too numerous and too high; employment growth that is moderate at best (poor if you look strictly at high-wage jobs); spending that exceeds revenues; slow wage growth; and agencies that try to do so many different things they end up straying from their core missions.

Lower-wage jobs dominate Connecticut's post-recession employment growth. Source: State Office of Policy and Management.

The governor's new plan makes a serious effort to tackle these shortcomings, align the budget with fiscal realities, and streamline agency efforts.

It promotes lean strategies, better use of IT, a greater focus on core missions (rather than doing everything for everybody), and efforts to get real outcome measures.

In short, this plan reflects a lot of the recommendations businesses have been pushing for over the last several years.

To be sure, many people won't like it.

It cuts spending approved for FY 2017 by 3%, allowing a 1% increase from forecast FY 2016 spending. While there are cuts many of us would rather not see, in aggregate this change in direction is long overdue.

Some things will need more exploration, such as details of pension changes and how block grants will work. But the basic direction is a real improvement.

The old ways haven't worked, and the governor acknowledged it's high time the state starts living and operating within its means.
Passing it won't be easy, because things are slow to change.

The old ways haven't worked, and the governor acknowledged it's high time the state starts acting more like businesses and more like Connecticut's families by living and operating within its means.

We haven't dug into the fine details, and there may be things we later find we don't agree with, but at first pass this is a far superior plan to anything we have seen presented in many years.

It's a step in the right direction to begin restoring confidence in our fiscal management.

Pete Gioia is an economist with CBIA. Follow him on Twitter @CTEconomist.