Budget Maneuver Allows Half-Billion More in State Spending

An accounting maneuver that opens the door to spending about a half-billion more dollars in the next state budget–and makes it nearly impossible to control state spending in the future–is being planned by some state legislators.
The move is designed to take pressure off of Democratic legislators to live within the state’s constitutional spending cap that was adopted in 1992.
It’s also a great disservice to Connecticut voters who, after the adoption of the state’s personal income tax, overwhelmingly (more than 81%) approved the cap to limit the growth in state spending to the greater of inflation (CPI) or the growth in personal income.
Connecticut faces a $2 billion deficit over the next two fiscal years, at a time when our economy is struggling and job creation remains weak–and after a record $1.5 billion tax increase passed in 2011.
Yet both current state budget proposals increase spending by 10% over the next two years and exceed the state’s spending cap by about $500 million.
Faced with the reality of not being able to set priorities or lean the cost of government, some lawmakers want to spend more—and avoid making the tough decisions needed to limit the growth in state spending.
So they are simply planning to intercept about $500 million in spending off the General Fund books so that it won’t count toward the state’s spending cap. In its place? More spending.
And with the increased spending must come more revenue—which is also what some legislators are now looking for.
This is a dubious and unacceptable maneuver that:

• Violates the spirit of the state’s constitutional spending cap.
• Avoids the real issue that Connecticut cannot afford to keep spending the way it has.  In the last 20 years, state spending increased 153% while the state’s population grew just 9%, and household income 59%.    
• Opens the door to lawmakers using this gimmick at any time in the future when state budget ends don’t meet.

Voters understood that the spending cap wouldn’t stop state spending from rising but would keep it under control. 
What lawmakers have to come to grips with is that we have to stop spending beyond our means–and we can find more ways to reduce the budget and increase the effectiveness and efficiency of state government.
Last week, officials found significant new savings in the budget. Policymakers should keep looking, and there are many suggestions available on how to reduce state spending.
Using a maneuver like this will only hurt Connecticut’s taxpayers and economy, and will violate the spirit of the state’s constitutional spending cap.
For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.