The budget is the most complicated and difficult thing that the legislature does, which is probably why politicians, pundits, and partisans try to turn it into a one-line riddle with easy, obvious solutions.
While satisfying and good for scoring political points, that kind of over-simplification is more a distraction than anything else.
There’s a gap between projected revenue and spending, and everyone is sure the governor and legislative Democrats are fixing it the wrong way. Their biggest critique, and the critique of many others, is that spending is the problem, so obviously the thing to do is make lots and lots of program cuts and maybe even cut taxes. Right? CBIA, the local business and industry lobby, points out that spending has risen massively since the early 1990s as education costs, employee benefits, and pensions exploded.
If the state’s spending so much more money than it’s bringing in then clearly there’s something wrong. The state is not living within its means, which is hampering the economy in some nebulous way. I see this pro-austerity argument a lot, and it all goes back to the idea that debt and government spending are inherently bad for the economy. No amount of evidence from European countries struggling to get up off the mat under austerity regimes seems to matter. Not even the debunking of an influential pro-austerity study seems to undermine the faith so many have in the idea that “tightening our belts” will somehow lead to prosperity.
The other problem with the austerity approach is political. A lot of state spending is wrapped up in obligations we’ve already made to employees, including pensions. Also, part of the deal with unions from 2011 was eventual raises and no layoffs for two more years, meaning that there isn’t a lot of flexibility there. Clearly the governor thought we’d be out of the woods by now. The fact that we aren’t is awkward, to say the least.
Then there’s the argument from the left that we should obviously just raise taxes on the rich again, and then the deficit will be solved. Easy! After all, those dastardly millionaires clearly have plenty of money, and there’s programs, institutions and projects that are crying out for relief. The problem is that we did that last time. In fact, the “balanced approach” of program cuts, employee give-backs, and tax increases made things a little bit better, but they didn’t actually erase the deficit. The economy is still sluggish, so revenue collections are down, and the amount of money the state has is less. It’s also hard to completely dismiss the complaint that higher taxes will eventually drive some business out of state — though that threat is often overblown. Just like we can’t cut our way to prosperity, we can’t really tax our way there either.
The threat of political doom is actually far worse. Election 2014 is looming, and if there is another tax hike it would almost certainly mean a Republican governor, more Republican legislators, and the end of the run of progressive success Democrats have enjoyed. Since the backlash against taxes is always stronger than the backlash against cuts, there is no political appetite among Democrats for another big tax hike this year.
So it seems the governor and legislature have created for themselves a neat little trap, and then locked themselves inside. There is no way out that won’t be difficult and painful. So what now? Democrats so far seem to be leaning toward stopgap measures like extending a few tax increases set to expire, raiding the transportation fund, and borrowing, none of which are particularly appealing. Meanwhile, crucial institutions like the state university and community college system are falling into neglect. The governor and the legislature must decide how to bridge the gap, and what to fund or not. None of this is easy, and a neat solution is far from guaranteed.
That doesn’t stop partisans or pundits from looking for easy answers. That may be why legislative Republicans didn’t bother crafting an alternative budget, as they have since 2007. Since putting something out there opened them to all kinds of criticism, they decided to do nothing at all this year and snipe at Democrats from outside the process. That’s great for scoring political points, but obscures the real problems.
Let’s stop pretending that there are easy solutions to Connecticut’s budget. Maybe then we can start to make the painful choices that might, someday, put our finances on a more stable footing.
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.