Fixing State’s Finances ‘Not Partisan Issue’
Connecticut’s historic budget deficits and long-term fiscal challenges have to be dealt with, said budget director Benjamin Barnes at the Economic Summit and Outlook last week in Hartford. And solving them, said co-panelist Craig Miner, Ranking Member of the Appropriations Committee, can’t be a “partisan issue” in the legislature.
Barnes, secretary of the Office of Policy and Management, was joined by Rep. Miner (R-Litchfield), in fielding questions from Keith Phaneuf from the Connecticut Mirror during the Economic Summit and Outlook hosted by CBIA and the MetroHartford Alliance.
[Pictured, above: Rep. Craig Miner, Keith Phaneuf, OPM Secretary Ben Barnes.]
“We have to set ourselves on course to deal with Connecticut’s unfunded and underfunded pensions, the debt in the state’s unemployment compensation fund, moving to GAAP accounting,” and other long-term needs, said Barnes.
The way to do that, he said, is to have “positive financial results and then apply excess revenues to the long-term gaps over time.”
One question hanging over this year’s financial results is whether the state will hit its targeted savings of $180 million from cost-saving actions, ideas and suggestions from state employees. The target is one of the factors necessary to balance the state budget—along with the state employee union concessions, some spending cuts, and significant tax increases.
Barnes said he “feels pretty confident” the target will be hit, citing new leadership in state agencies who are “implementing a lot of changes … that’s bearing fruit.” He cited the state departments of Social Services and Administrative Services as two agencies in particular that were achieving savings and finding new ways to operate more effectively.
Miner, however, said he was concerned that the state recently borrowed money from bond funds to pay operating costs. “That should set off alarms.”
While the state continues to await the cost-saving ideas from state employees, “money continues to go out the door and we are having to borrow to pay our bills,” Miner added.
But Barnes said it is “perfectly appropriate to manage [the state’s cash] using bond proceeds temporarily.” If the state had been using GAAP over the past decade, there would have been cash on hand to cover the needs.
With gradual improvement in the economy over the next several years, said Barnes, the state should eventually realize budget surpluses “based on the changes we’ve made this year.”
For more information about state budget issues, contact CBIA’s Bonnie Stewart at 860.244.1925 or firstname.lastname@example.org.
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