The great Yogi Berra, who died this week, once said “It’s like déjà vu all over again!” He probably wasn’t talking about Connecticut’s budget, sadly, but the sentiment absolutely applies.
Back in 2014 it became more than obvious to anyone who was paying attention that the winner of the gubernatorial election would be facing yet another massive deficit, much like the one faced by the winner of the 2010 election. Gov. Dannel P. Malloy dismissed the suggestion while on the campaign trail, but after he was re-elected it turned out everyone was right.
And thus we raised taxes and cut services and shuffled money from one place to another, which is basically the same thing as putting some duct tape across a crack in an aged, groaning, near-to-bursting dam and declaring it fixed. The solutions that the Democratic majority passed and the governor signed this spring did exactly the same thing that Malloy’s “shared sacrifice” fixes did in 2011 and Gov. M. Jodi Rell’s benign neglect did in 2009 — they kicked the can down the road.
Here’s where we stand right now: according to out-year projections from the legislature’s nonpartisan Office of Fiscal Analysis Budget Summary for 2016-2017, if we keep services at current levels we’ll be running deficits of $650-$760 million for 2018, 2019, and 2020.
Even more ominously, at a meeting Sept. 18 budget chief Ben Barnes announced that, because there isn’t a “reservoir” of capital gains out there this year thanks to drops in the stock market, the Malloy administration was making $103 million worth of rescissions. Barnes also said that ongoing problems with slow growth and weak markets have the potential to impact 2017 and beyond, which means those projected deficits for 2018-2020 could end up being a lot higher.
In short, things aren’t nearly as fixed as our leaders keep reassuring us they are. So get ready for yet another round of agonizing budget cuts and debates over taxes, salaries, and services in 2017!
Why does this keep happening? It’s a surprisingly difficult problem to pin down, much less solve. Sure, we have a legislature that spends tons of money, but no one seems to be able to agree on what services to cut, which prisons to close, which DMV offices to combine, to fix it, or whether those cuts would just make things worse.
It’s also true that rich individuals could kick in more money, but raiding lower Fairfield County for cash is politically dangerous, and it gets less effective over time. This is especially true when the stock market is weak, as it is now. As Barnes noted, Connecticut residents tend to feel gains and losses in the market more forcefully because we own a disproportionate amount of stocks.
We also don’t support business the way we should, but would being more welcoming to business and cutting corporate taxes really generate hundreds of millions of dollars in new revenue for the state? Would it even offset the money lost to corporate tax cuts? The federal government tried that during the Bush years, and a surplus turned into a massive deficit.
Lastly, nobody can deny that state employees earn fairly decent money and collect generous pensions. But if we cut these, then workers and retirees will have less money to spend. Somehow I don’t think that’s going to work out, either. Not in the long run.
The real trouble may be with how we fund government in the first place. The budget’s problems are deeply tied to the health of the economy, and rely heavily on market forces that happen beyond Connecticut’s control.
Worse, people tend to need services a lot more when the economy is bad than when it’s good. The federal government solved this problem during the Great Depression by going into debt and deficit spending, which is far less sustainable for us than it is for them.
Maybe we can’t fix this problem by tinkering with tax rates, salaries, and services. Maybe the whole way we fund our government is so out of step with how our world and economy are changing that it doesn’t work anymore.
I don’t know how to fix it. Governments of post-industrial states all over the country and the world are grappling with falling revenues, increasing demands for services, and sluggish economies. No one’s found a solution yet.
But I do know that we can’t keep putting this off in the hopes that the economy improves. The governor and the leaders of the legislature need to admit that the budget crisis, far from being solved, may only just be getting started.
Susan Bigelow is an award-winning columnist and the founder of CTLocalPolitics. She lives in Enfield with her wife and their cats.
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