Tipping Point for State’s Economy, Budget?

Issues & Policies

Connecticut finished 2014 on an economic high note, adding 4,800 jobs in December for a 12-month gain of 26,700 positions, bringing the state 81% back from the recession in terms of jobs.

But the U.S. overall recovered all jobs lost from the recession nearly a year ago, and we're among 15 states that are still below pre-recession jobs numbers.

A new study now reminds us that while Connecticut’s recovery is gaining steam, there’s still lots of work to do.

This week, a Gallup Poll of workers throughout the nation placed Connecticut last in state job markets in 2014.

Notably, Gallup measured workers’ perceptions of the job market, which do necessarily reflect the reality of the situation but are powerful impressions nonetheless.

As Governor Malloy prepares to make his budget address to the legislature on Wednesday, it’s important to remember that the state’s bottom line has a big impact on our economy and the actual vitality of Connecticut’s job market.

We’re facing another billion-dollar-plus deficit projection in the state’s next two-year budget. Just a few years removed from a deeper deficit that caused the state’s largest tax increases, taxpayers are wary of what this year’s remedy will be.

Above all, we need to balance the new two-year state budget without tax increases or borrowing and keep state spending strictly within the state’s constitutional spending cap.

We’re at a tipping point.

All eyes will be on the governor’s proposal to make the budget numbers work. But we can’t forget that the best long-term solutions toour fiscal challenges are growing our economy, controlling state spending, and making state government as efficient and effective as possible.

That’s why some of the governor’s proposals leading up to his budget address are particularly interesting.

The corrections system is one of the biggest areas of state spending. As CBIA and the Connecticut Institute for the 21st Century have long asserted, certain reforms that other states have used successfully can provide better and more affordable services while ensuring public safety.

Last month, Gov. Malloy proposed several reforms under the name of “Second Chance Society.” He would send fewer nonviolent individuals to jail, eliminate mandatory minimum sentences for drug possession, streamline parole hearings and reduce backlogs, and expand life opportunities for ex-offenders.

These are actions that can accomplish a public good and provide fiscal relief. Incarcerating nonviolent offenders is far more expensive than giving them strict supervision and the chance to make a better life.

Hopefully, the next state budget—the final version negotiated between the administration and legislature—will include these ideas and others that could similarly accomplish positive results and improve Connecticut’s fiscal condition:

  • Use zero-based budgeting throughout state government—that is, start each budget cycle afresh without simply accepting previous spending levels
  • Mandate state agencies to measure the results of state programs that cost more than $1 million; continue to lean state agencies to make them more effective and efficient
  • Open bidding on state services that Connecticut’s private sector could perform as well as or better than state government
  • Align social services programs and systems around the “whole family” concept—create solutions for families, not just the individuals in need
  • Accelerate reforms of elder care by adopting the successful approaches of such states as Oregon and Vermont

“Employers need to feel that state policymakers have control of our future state fiscal situation without resorting to tax and fee increases,” said Pete Gioia, CBIA economist and vice president.

“This is necessary for them to feel that Connecticut is a safe place to make additional job-creating investments.”

Gov. Malloy’s budget address on Wednesday, Feb. 18, will begin the process of setting the next two-year budget. The legislature will be in session until midnight on Wednesday, June 3.

For more information, contact CBIA’s Louise DiCocco at 860.244.1169 | louise.dicocco@cbia.com.


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