The horse trading that typifies the state budget process continues as evidenced by a recent Bridgeport education rally. “Legislators need to stand with parents and save our schools,” said a Bridgeport resident and supporter of public charter schools at a rally targeting charter school budget cuts. Arts and other groups are being heard, as well.
Office of Police and Management Secretary Benjamin Barnes said recently, “There are still two months in the fiscal year until June 30. We will take appropriate action to achieve additional cost savings and keep our state”™s budget balanced for the year.”
A pair of letters to the Fairfield County Business Journal follow.
Arts and culture budget analysis
BY JULIA WILCOX
On April 27, the Appropriations Committee voted on the recommended budget (House Bill 6824) for state fiscal years 2016-17, which passed 33-24 along strict party lines. The $40.46 billion biennial budget proposal represents the second phase of the budget process, with the final budget negotiated by legislative leaders and the governor before the regular session ends June 3.
The main difference is the recommended budget would add $470 million in additional spending ($236 million for FY16; $278 million for FY17) and redefine the state state”™s spending cap. The plan would reduce salaries for nonunion state workers by nearly $60 million over two years and cut overtime by $62 million over the biennium. Spending would increase by 4.6 percent over the current year and another 3.3 percent the following fiscal year, an almost 8 percent increase over two years. However, the Finance Committee would have to add new revenues to match/balance the spending increases. It is important to note that the recommended budget only includes spending (expenditures); the Finance Committee is expected to propose its revenue plan later this week. As always, CT Nonprofits will provide additional information as it becomes available.
The Appropriations Committee budget addresses reductions to funding for arts and culture accounts.
The governor reduced funding of $3,094,957 in both FY16 and FY17 for arts and culture direct line-item grant accounts to achieve savings. This reduction amounted to a 41.4 percent cut to these accounts. The committee does not concur: The committee maintains funding for arts and culture direct line-item grants at the available FY15 appropriation level.
The committee has provided for:
Ӣ $25,000 for the Barnum Museum in Bridgeport for FY16 and FY17;
Ӣ Increased funding for the Hartford Urban Arts by $20,000;
”¢ Increased funding for the Twain/Stowe homes in Hartford by $13,654 for a total appropriation of $100,000 in each of FY14 and FY15.
Ӣ $25,000 for the Playhouse on Park in West Hartford for FY16 and FY17 under the Connecticut Flagship Producing Theaters Grant account;
Ӣ $25,000 for the Connecticut River Museum in Essex for FY16 and FY17;
Ӣ $25,000 for the Connecticut Virtuosi Orchestra in New Britain for FY16 and FY17; and
Ӣ $25,000 for Arte Inc. in New Haven for FY16 and FY17.
This session in particular, we hope you will continue to increase your engagement in the advocacy process. Please do not hesitate to reach out to me with any questions or for assistance regarding testifying and/or educating your staff, board, etc.
Julia Z. Wilcox is senior public policy specialist for the Connecticut Association of Nonprofits. Email her at JWilcox@ctnonprofits.org.
The mother of all budget gimmicks
BY TIMOTHY M. HERBST
In 1992, 81 percent of Connecticut residents approved a constitutional state spending cap. This overwhelming approval was arguably an antidote to deal with the backlash of the broad-based state income tax proposed by Gov. Lowell Weicker and approved by the General Assembly in 1991. The spending cap was a way of guaranteeing that if the people”™s income would be taxed to feed state government, the spending cap would be a mechanism to curb the appetite of the taxers and big government enthusiasts.
The spending cap was viewed as a scale of fiscal fairness, where government could not grow at a rate that people”™s incomes could not sustain. Now, the Democrat-controlled Appropriations Committee wants to change how the law to stop reckless spending is calculated. If this occurs, hard-working middle -class families will see another $605 million added to a flawed, out-of-balance budget offered in February by Gov. Dannel P. Malloy. With this partisan sleight of hand, the Democrats are effectively denying the existence of a mandatory $1.5 billion payment to the underfunded state pension account. It”™s similar to a family getting a whopping minimum credit card payment and putting it in the waste basket.
Since the spending cap has been in effect, exempt pension payments to the fund have never been worthy of being shifted off the state”™s ledger. These pension payments are known as “soft debt,” but the effect of this legislative punt will have a destructive impact on Connecticut”™s finances. It will demonstrate to the financial rating agencies that Connecticut is not serious about managing primary financial responsibilities. It could lead to a downgrade in Connecticut”™s credit rating, meaning the cost of borrowing will increase for important public projects such as schools, roads, bridges and other public and recreational facilities. Despite 23 years of longstanding past practice and accepted public policy, the Appropriations Committee is now attempting to commit the mother of all budget gimmicks. It is an affront to the voters of our state who demanded this reasonable restriction through a constitutional amendment.
The cap, determined by a calculus of the previous year”™s revenue, statewide income, expenditures and inflation, was passed in 1992 as a way to guarantee that state spending was held in check. A Connecticut Business and Industry Association economist recently explained the rationale for the cap, when he said, “Taxpayers would have to face an income tax but policymakers would forever be forced to control state spending.” Connecticut provides generous pension benefits and health care benefits for its active and retired employees, but previous decision-makers failed to properly plan and budget for the future costs. As a result, the state began to feel the crippling effects of its long-term obligations as a result of decades of putting off the inevitable. For example, the cap allows less than 3 percent overall spending growth next fiscal year. But the contributions to the state employees”™ pension and retirement health care programs jump 13 percent and 18 percent, respectively.
That credit card bill may have been thrown in the garbage, but it was still earning late fees and interest. The same is true for Connecticut”™s pension obligations, and the best answer majority Democrats have at a critical moment is to simply deny its existence for purposes of drafting an honest state budget. What will the majority Democrats do next? Will they not include municipal aid or salaries when calculating the spending cap? How about cost-of-living increases for state employees or funding for economic development programs?
In Trumbull, as with many other cities and towns, operating budgets clearly reflect the pension and benefit costs that we must properly fund and budget for each year. By making these costs honest and transparent, we have worked in other areas at the local level to make government smaller and smarter, across all departments and sectors, thus keeping our tax rate stable.
It is time for our leaders in Hartford to stop thinking about the next election and start thinking about the next generation.
Timothy Herbst is in his third term as first selectman of Trumbull. He was the 2014 Republican candidate for state treasurer.
