In 1639, Connecticut created the first written constitution of any known government. Called the “Fundamental Orders,” this constitution created a structure by which the settlers and residents of Windsor, Wethersfield, and Hartford could maintain an “orderly and decent government.”
Within this first constitution was the power to tax or levy monies from each town.
Now, 376 years later, the state legislature is ignoring the basic principles of self-governance and risking the original stability sought and obtained by the European settlers in Connecticut.
In 1991, facing an alleged budget crisis, Gov. Lowell Weicker up-ended Connecticut’s tax code and secured the implementation of an income tax. As part of the compromise to institute this tax, Gov. Weicker and the legislature also agreed to pass a spending cap.
The spending cap is a statutory structure that is meant to limit the growth of state spending to inflation or the increase in average personal income. The legislature passed a temporary spending cap in 1991, and in 1992, more than 80 percent of Connecticut voters approved the 28th amendment to the Connecticut Constitution, adopting the permanent limit on state spending.
This amendment is simple. It states that the legislature should design and implement a spending cap. But the legislature and successive governors, including Gov. Dannel P. Malloy, have failed to show the fortitude to enforce the amendment.
In a new policy brief published this week by the Yankee Institute, I show that for 23 years, the amendment has laid in a procedural flux. Instead of defining the constitutional cap, the legislature has been reluctantly using the temporary statutory spending cap. This spending cap, which is just as limiting as the constitutional cap, should provide the same result: a balanced budget and limited growth in state spending.
In the past, the legislature has paid lip service to the spending cap, while using accounting tricks, exemptions, and general sleight-of-hand to make the budget appear balanced even when it is not.
This year, however, the jig is up.
This week, the appropriations — or spending — committee of the legislature approved a budget that did not include almost one billion dollars in employee pension payments. Under the current spending cap, found in the state’s General Statutes Sec. 2-33a, payments to employee pensions must be considered “general budget expenditures” and cannot be exempted from the spending cap.
The only exceptions to the spending cap currently allowed under the law are payments on state loans, surplus tax revenue, payments to some municipalities and the first year expense of federally mandated programs. It makes no mention of payments to employee pensions.
By its own admission in the budget, and by the assessment of the nonpartisan Office of Fiscal Analysis, the legislature has set forth a new definition of the spending cap, while ignoring the clear intention of the Connecticut Constitution to limit the growth of government.
What makes it even more egregious is that lawmakers did not use their “new” definition of the spending cap to calculate the cap for this year, so they show they are $1.5 billion under the cap.
The legislators claim that their redefinition of the cap may provide an opportunity to discuss the spending cap. Their actions, however, show a complete disregard for the Constitution and the law.
If the legislators do not declare a “fiscal emergency” by a three-fifths vote or redefine the amounts subject to the spending cap by the same margins, they put the fiscal future of the state at risk. Failure to do so is a dereliction of duty by the legislature.
The budget, as currently presented, is unconstitutional. If this budget were passed, it would not present a political question, but instead a real and true failure by the legislature to follow the law. Even worse, once signed it could result in significant litigation by those harmed by an increase in taxes, and prevent the state from borrowing money and cause direct harm to the state’s credit rating.
If the legislature wants to spend over the amount prescribed by the cap, the governor should declare a financial emergency and present the issue to the legislature. In the alternative, the legislature should find the political gumption to fully implement the 28th amendment to the Connecticut Constitution, like the voters asked them to over two decades ago. This would prevent the annual kabuki performed by the governor and endorsed by the legislature, and save our state from a disastrous and expensive mistake.
Peter C. Bowman is the President of the Federalist Society, Connecticut Lawyer’s Chapter, and a trial attorney in Windsor. He recently drafted a policy brief, Connecticut’s Spending Cap: A Legal Overview, for the Yankee Institute for Public Policy. Follow him on Twitter @pbow.