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When is a budget more than a budget? When it’s a permanent license to spend

By state Rep. Gail Lavielle

R-Wilton

HARTFORD, Conn. – As we approach the end of Connecticut’s five-month 2013 legislative session – with less than two weeks to go – the state’s next biennial budget is still hanging in the balance. The reason for the impasse? The majority party’s proposal requires spending more than state law allows. For the proposal to pass in the General Assembly, both the House and the Senate must first approve a change in the state’s spending cap, and they must do so by a three-fifths majority.

This is no insignificant matter. Any redefinition of the spending cap will affect not just this budget, but all others in the future. The implications for taxpayers are serious indeed. It’s not a good idea.

Connecticut’s spending cap sets a limit on how much the state can spend every year. Calculated using several factors including personal income and inflation, as well as spending during the previous year, the cap was introduced in response to the passage of the state income tax in the early 1990s, through a constitutional amendment approved by an 80 percent margin. Its purpose was to ensure that the state’s spending would not outstrip its ability to raise revenues from taxpayers. Indexing the cap to economic factors is meant to establish parameters for how much Connecticut residents can afford to pay in taxes. The cap therefore provides a guideline to keep state government from pushing taxpayers beyond their means.

Both Governor Malloy and the majority party have proposed 2014-2015 budgets that would increase spending by close to 10 percent, in each case exceeding the spending cap by more than $1 billion over the course of the biennium. They are now negotiating the language of the budget bill that will eventually be brought before the legislature for a vote. If that bill still includes a redefinition of the spending cap, it will require a three-fifths majority to pass.

There has already been one vote on redefining the spending cap, and that was in the Appropriations Committee on April 19, the same day that the committee passed the majority party’s budget proposal, which I opposed. HB 6352, the bill redefining the cap, which did not require a three-fifths majority at the committee level (and which I also opposed), passed as well.

The redefinition proposed in HB 6352 would exclude two types of spending from the total amount governed by the cap: state spending during the first year of certain federal programs, and payments into state employee and teacher retirement funds. Redefining the cap does not, of course, provide any additional money. It just raises the spending limit.

For example, if someone told you that you could spend $100 more than you had, would that mean that you suddenly had $100 extra to spend? Certainly not. The only difference between this scenario and Connecticut’s is that in Connecticut’s case, you have to substitute $1 billion for that extra $100.

Whether a three-fifths majority vote in favor of redefining the spending cap is attainable in both chambers remains an open question. If it happens, what is certain is that it will have grave consequences for Connecticut.

The first is short-term. If the legislature authorizes the state to spend $1 billion more than its taxpayers can afford, it will have to find the money. More taxes should not be an option: after the largest tax increase in Connecticut’s history during the last two years, the public will be hard-pressed to accept further sacrifice. That leaves massive borrowing, which will sink Connecticut, which already has the country’s highest per capita debt, into further financial distress and put its already downgraded debt rating at risk.

The other consequence is even worse. Redefining the spending cap will permanently diminish the only protection that Connecticut’s taxpayers have against state spending policies that take no account of their personal financial circumstances.

The alternative that makes sense is to forgo the current and future perils of altering the spending cap and to rein in the budget instead of expanding it. Connecticut is facing a $3 billion deficit in the next biennium, and it falls at or near the bottom of almost every ranking of the states’ economies and financial health. A budget that eliminates that extra $1 billion in spending would be by far the best choice for Connecticut and its residents, both now and in the future.

State Rep. Gail Lavielle (R-Wilton)

Comments

3 responses to “When is a budget more than a budget? When it’s a permanent license to spend”

  1. dc2

    More taxes should not be an option: after the largest tax increase in Connecticut’s history during the last two years, the public will be hard-pressed to accept further sacrifice.

    Ms. Lavielle, with all due respect, do you honestly think the public in CT has a choice? There is no way NOT to accept it, because if it will be an income tax hike, it comes out of our pay checks, whether we like it or not. What power do we really hold over a spend-like-it’s-monopoly-money democratic controlled administration and legislature? Not that the previous administration was anything to brag about.
    I’m sorry if I sound like a defeatist this evening, but even if every taxpayer in CT marched on Hartford in opposition to this insanity, I think the legislative majority up there would neither notice nor care.
    It used to be that CT was among worst states to die in (estate taxes); and then more recently worst state to retire in (cost of living,etc). Now it’s becoming worst state to live in?
    So to offer some general constructive ideas: STOP giving my money to the casinos. STOP giving my money to entertainment non-profits. STOP giving my money to exorbitant union salaries and benefits. STOP giving my money to multi-billion hedge funds to move 10 miles down the road.

  2. LWitherspoon

    Rep. Lavielle,
    Please keep fighting to bring fiscal sanity to Hartford. A ten percent increase in state spending is absurd.

  3. 0ldtimer

    A spending cap, at the State, Local, and Federal level sounds like a great idea. The devil is in the details. Who loses a job ? What schools get closed ? What programs get cut ? What weapons systems are done without ? Which bridges do not get inspected ? What training for military and law enforcement gets cut back ?

    A certain level of inflation, devaluing the dollar, seems to be built in to the system. Proponents of various expense items are all looking for increases just to stay even.

    The Governor has pointed out how easy it is for the Republicans to criticize his proposed budget without a similar proposal of their own. Everybody is in favor of cutting taxes, or at least cutting tax increases, nobody wants their favorite progams cut. All the critics should make responsible suggestions for controlling the budget rather than just complaining Malloy’s budget is too much.

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