How did we get to the fiscal crisis we’re in? What’s behind the huge state budget deficits and long-term debt?

After all, Connecticut has just about the same number of people living here today as did in 1990, with the state growing only slightly from a population of 3.27 million back then to around 3.5 million now.

The number of people with jobs is also about the same today as then, with an average overall number at about 1.725 million. But while in 1990 Connecticut taxpayers supported a state budget of just over $7 billion, taxpayers are now struggling to pay for a state budget of $19 billion.

Even accounting for inflation, and with a wider range of state services now being provided, that’s a whopping 168% increase in state spending.

How has that happened? Here’s a look at several major areas of spending increases, from 1990-2010:

Education Aid to Towns   60%
State Employee Pensions 181%
Corrections System 175%
Medicaid 253%
Debt Service (paying off state borrowing) 670%
State Employee Retiree Healthcare 926%

Today we face a state budget gap of $3.5 billion (which of course would have represented half of the entire state budget back in 1990). While the deficit represents the higher costs of providing more state programs and services, and lower tax revenues caused by the recession, it also reflects years of poor spending habits and a general lack of accountability on how well taxpayer dollars are being spent.

Policymakers need to look closely at areas of state spending increases to determine what can be adjusted. The question is, are we spending accurately on priorities?

Connecticut taxpayers simply cannot afford the size and scope of state government today. And our $3.5 billion structural budget gap and $60 billion in unfunded liabilities are eroding the confidence of employers in the state as a place to create and keep good jobs.

The only way for Connecticut to move beyond our fiscal crisis and build a foundation for long-term growth is to encourage private-sector employers to invest here, create jobs and drive our economy.

To rebuild confidence, policymakers need to reduce the size and cost of state government and increase its efficiency and performance.