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Gov. Jodi Rell started the year off on the right foot by looking to cut into government costs for the rest of this fiscal year.
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“I have ordered a sweeping review of all existing state contracts,” Rell said in announcing the measures on Jan. 12. “If the service being provided is not essential, it will be terminated. If it is essential, we will seek to negotiate givebacks in the contract. During these tough fiscal times, government must focus on programs that help people. All but the most essential expenses can wait.
“If canceling contracts will help save jobs or help protect programs for our most vulnerable citizens, then state government can live without magazine subscriptions, without new athletic equipment at certain facilities and without having our office windows washed for six months.”
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While we might disagree with the canceling of magazine subscriptions, not wishing to see our brothers in arms in the distressed publishing industry endure any more pain, we realize we all must share some economic pains of the day. As must those businesses impacted by the governor”™s cuts to state contracts.
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But the fiscal crisis is what it is. And there”™s no way around this simple fact: When revenues are down and expenses are up, cuts must be made.
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Rell”™s action is precipitated in part by a report from the Department of Revenue Services, which found that income tax estimated payments that were due Jan. 15 were running 22 percent below the same period of 2008. Adding to the fall-off in state revenues were corporation tax estimated payments that fell 30 percent compared with a year earlier.
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Add also a 3.5 percent drop in sales tax collections to the witches”™ brew and all signs point to government cuts.
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The Connecticut Business & Industry Association has called for cuts and more in its 2009 Government Affairs Agenda, which it has titled “Securing Connecticut”™s Economic Future.” They could have added “Or Else” to make it more ominous.
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With a budget deficit estimated at $6 billion over the next two years, the state will have to look in the mirror and come to grips with the way it does business.
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The CBIA has suggested that the governor and the lawmakers leave no stone unturned in examining all state agencies and “eliminating areas that are outdated, poorly functioning, or better managed by the private sector; encouraging regionalization of services; and negotiating with unions to reduce health care and pension costs.”
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Efficiency and cost-effectiveness are two essential items that should be embraced by state government and not just by business.
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Tax increases and anything that can affect the cost of doing business in the state should be avoided.
John R. Rathgeber, CBIA”™s president and CEO, summed up his association”™s wish list by saying, “While our current situation is grim, we know that adversity often brings opportunity. We urge state legislators to look for opportunities to pass needed reforms. Jobs are the state”™s best form of economic recovery, and lawmakers must do whatever they can to promote a climate in which job creation can flourish again.”
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Let”™s hope the lawmakers are paying attention during this legislative session and not heap any more bad laws on the backs of business.
