Lawmakers this week made short work of overwhelmingly passing a plan to close the current state budget gap of $220 million with a mix of spending cuts and one-time fund transfers.

The State Senate vote was 33-3 in favor of SB 474, and the House rapidly followed suit with a 127-16 vote (with seven representatives absent).

State-Budget_thermometer_040116
*Prior to March 2016, Gov. Malloy proposed two major budget rescission packages, later modified and enacted by the legislature. Without those measures, the problem the state is facing now would be worse.

Governor Malloy signed the bill, which restores spending cuts he had proposed earlier this month, but trims line-item funding to scores of state education, economic development, human services, and healthcare programs.

The package includes $133 million in spending cuts, along with $87.2 million in one-time “sweeps” of surplus dollars from various accounts into the General Fund.

Much harder work lies ahead—a projected $900 million budget gap for the second year of the biennium, and billion-dollar deficits in the next years— that will require tougher decisions.

CBIA applauds this week’s agreement but urges policymakers to get started as soon as possible on long-term, sustainable spending reforms that can help reduce those mountainous deficits—and better serve the people of Connecticut.

If, for example, the state had moved more quickly on reforms of the state’s long-term healthcare and information technology systems—among the ideas floated for several years now by the Connecticut Institute for the 21st Century—the budget situation would not be as dire today.

Connecticut has made some inroads in those areas, as well as in implementing Lean efficiency strategies in some areas of state government, but not nearly enough to affect their full savings potential.

Long-Term Care

Take long-term healthcare. Roughly 60% of those who are receiving long-term care in the state now are doing so at home or in a community-based system, while 40% receive care in an institutionalized setting.

That’s good, but according to CT21, increasing the percentage of those who receive these services in home or in a community-based setting from 60% to 75% could produce a savings of $657 million for the state over the next few years.

Some states have even gone beyond the 75% threshold to help their residents choose more comfortable care and help those states save more.

IT Fragmented

CT21 also has documented how Connecticut’s IT systems are fragmented, lack overall coordination, and are being operated by an aging workforce with many approaching retirement.

What’s more, says CT21, the state is heavily dependent on consultants “to circumvent the [state’s] convoluted hiring process.”

The institute recommends following the best practices of several other states—such as Michigan, Georgia, Texas, and California--that have moved to centralized, strategic and cross-communicating IT systems.

The successful models are there for Connecticut to emulate.

Still, Connecticut has some made progress on IT—in E-Government access for taxpayers, lean process improvements, data center consolidation, and others.

Contact Connecticut state lawmakersIt’s just that those beginning efforts must now give way to all-out commitment.

Connecticut is facing even greater deficits beyond 2017. In order to scale them back, state lawmakers must move, in this session, to wait no longer and get started on long-term budget reforms.

It’s an economic issue, too.

Employers in Connecticut need to see greater sustainability, consistency, and predictability in state finances in order to make long-term investments in jobs, facilities and operations here.

With only five weeks remaining in the 2016 legislative session, it’s critically important that policymakers act now to create a fiscally sound future for the state.


For more information about state spending, contact CBIA’s Louise DiCocco (203.589.6515) | 

For more information about state taxes, contact CBIA’s Bonnie Stewart (860.944.8788) | @CBIAbonnie