With Connecticut in a severe fiscal crisis—a potential $700 million deficit this year, and multi-billion dollar budget gaps in the next two years—it’s astonishing that some lawmakers are trying to open the door to higher state spending by working around the state’s spending cap.
But that’s what most of the Insurance Committee voted to do with the approval of SB-19, which could pave the way to higher state spending (and higher health care costs) in Connecticut.
In a mostly party-line vote (with all Democrats except Sen. Joan Hartley supporting, and Republicans and Sen. Hartley opposing; one committee member absent) the proposal exempts the state’s Insurance Fund, which bankrolls the state’s Insurance Department, from the spending cap.
The insurance industry pays for the Fund, but in reality, all health care consumers—businesses and individuals alike—are the sources of funding.
Lifting the cap off the fund means lawmakers would have a wide-open door to increasing spending within the Insurance Department. And once that happens, legislative schemes to bypass the spending cap could be attempted in other areas.
That runs directly counter to what lawmakers have been saying publicly—that the state is in a budget crisis and spending needs to be controlled.
The cap was adopted by lawmakers in 1992 specifically as a way to keep state spending within taxpayers’ ability to pay for it. It helped put Connecticut back on a sounder fiscal foundation, restrained the growth of state spending, produced surpluses that have been used for significant state projects, and continues to work as a marker for responsible state budgeting.
SB-19 ignores those important reasons for the cap and will lead to more state spending, it would also make people in Connecticut face higher health care costs because of the Fund being paid for by the insurance industry.
Lawmakers should look instead for ways to reduce state spending and bring about greater efficiency and effectiveness in state government.