Study Shows State Has Right Fiscal Tools in Place

A national progressive think tank has ranked Connecticut best in the nation for using the right tools to plan, implement, and assess its state budgeting and fiscal policy.

In its report, Budgeting for the Future: Fiscal Planning Tools Can Show the Way, The Center of Budget and Policy Priorities gave Connecticut a score of 8.5 out of a possible 10, for the No. 1 ranking (New York scored 7, Massachusetts 4.5, and New Jersey 3.5).

Every state, says the Center, needs to have and follow a roadmap of the state budget’s immediate and future impacts on the state’s fiscal health; “sufficient oversight” to ensure that these analyses of the budget’s impact are credible and nonpartisan; and ways to change course if necessary during the budget year.

The center lists 10 key tools to accomplish those goals and accurately chart a long-term fiscal course.

Tools include multi-year forecasts and fiscal notes, current services baselines, independent consensus revenue forecasts, a legislative fiscal office to review budget-related proposals, a rainy day fund, oversight of state tax credits, reviews of pension funding and public debt, and regular budget status reports.

“The report shows Connecticut has much of the needed structure to do better budgeting,” says Pete Gioia, CBIA vice president and economist. “But over the years, the state has lacked consistent use of the information that the tools provide.” 

That’s reflected somewhat in the state’s actual fiscal performance. After a record tax increase with continued borrowing in 2011, the state anticipates a half-billion- dollar surplus this fiscal year but facing sizable deficits in the next three.

What’s more, the state’s long-term obligations for state employee healthcare and retirement benefits, as well as borrowing, are improving but still among the most burdensome in the nation.

And Gioia pointed out that the Center’s report “doesn’t cite program measurement as a tool—as in, how well are state programs and services actually working?”

While the report acknowledges a good foundation for budgeting and fiscal management in Connecticut, staying on course will require budgeting within taxpayers’ means, and making the most effective use of tax dollars.

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