Even though it addressed some of the state’s economic priorities, the 2013 session of the Connecticut General Assembly did little to make state government more affordable or effective, and lost focus on how to unlock private-sector investments and restore job creation in the state.
Of greatest concern is that the new state budget increases state spending by 10%, relies heavily on one-time revenues, sidesteps the state’s constitutional spending cap, extends three business taxes, and increases borrowing.
Businesses believe that kind of fiscal policy will only keep Connecticut in a cycle of deficits, debt, and taxes that will continue to hamper the state’s economic recovery and discourage job-creating investments by businesses.
However, businesses are encouraged that the session did address such important priorities as reducing energy costs, reforming education, and supporting successful economic development programs. What’s more, lawmakers rejected several efforts to increase the costs of doing business in the state.
CBIA appreciates the support of the governor’s office, many legislative leaders, and committee chairs and ranking members in promoting positive legislation and in fending off harmful proposals.
Even after a record $1.5 billion state tax increase passed in 2011, policymakers faced a $2 billion deficit for the next two fiscal years. But the budget increases spending and employs many tactics that avoid making the tough decisions to keep the budget within taxpayers’ means. Most controversial, the plan does an end-around past the spending cap by taking the unprecedented step of moving $6 billion in Medicaid spending off the budget books.
Among other things, the budget also:
- Raids several funds—including $170 million from the Transportation Fund and $30 million from the Energy Efficiency Fund—and transfers those dollars into the General Fund
- Extends three business taxes that were set to expire June 30: The tax on certain power plants is extended for three more months, and the 20% surcharge on the corporation business tax, and reduction in the credit limit for the insurance premium tax will continue for two years
- Borrows $750 million to help convert state finances to Generally Accepted Accounting Principles
The budget does provide funds for a major expansion of the University of Connecticut, the landmark public education reforms passed last year, successful economic development programs such as the Small Business Express, and aid to cities and towns.
CBIA continues to urge state policymakers to focus on getting Connecticut’s economy moving ahead, help people get back to work, and lean the cost of providing government services.
For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or email@example.com.