Spend More: Committee’s Response to Budget Crisis

As if a $726 million budget gap for fiscal year 2011 isn’t big enough, the legislature’s Appropriations Committee this week voted to likely push the deficit past the $1 billion mark.

The committee approved a $346 million increase in state spending over what lawmakers approved six months ago for next fiscal year, and the proposal includes new taxes on hospitals and Connecticut-based insurance companies.

Increasing state spending as Connecticut’s budget deficits continue to worsen is a novel approach but one that’s hopefully not going to succeed. (See “Billions and Billions Could Be Saved,”  for ideas on how to control spending)

<p> To most people, Connecticut’s budget gaps–about $500 million this year, $726 million next year, and then rocketing to more than $3 billion each in 2012-2013—are pretty clear signs that state spending has to come back down to earth, at least to what taxpayers can afford.

Connecticut’s economy has been wracked by the recession with more than 100,000 jobs lost, thousands of businesses closed and tax revenues of all kinds dropping.

Yet the committee’s 29-25 vote sends the $19.3 billion, one-year budget plan to the House of Representatives. The plan is 4% higher than the current fiscal year budget and pushes Connecticut’s state budget above the $19 billion mark for the first time.

Significant opposition

However, many moderate Democrats and Republicans in the committee voted against the plan and the concept of higher spending met immediate resistance from most observers.

The Senate was preparing to vote on a deficit mitigation plan with budget cuts on Friday. It is rare for Senate and House Democrats to part on the budget issue, but some fiscally conservative Senate Democrats are clearly pushing for more cuts.

Unemployment rises

Meanwhile, as the Appropriations Committee was voting, news arrived that unemployment in Connecticut reached 9.1 percent in February, the highest rate yet in this recession, as the state’s economy lost an additional 1,100 jobs last month.

CBIA urges lawmakers to respond to the concerns of employers and employees alike throughout Connecticut by reducing state spending and making state government leaner, more effective and more cost-efficient.

For more information, contact CBIA’s Bonnie Stewart at 860.244.1925 or bonnie.stewart@cbia.com.