Reducing state spending has to become a habit in Connecticut if we are to ease the burden on taxpayers, streamline how state government works and drive economic growth.
That”™s why CBIA strongly supports SB 1059, which implements the recommendations of the bipartisan Commission on Enhancing Agency Outcomes. The commission”™s commonsense ideas not only help reduce state spending now but also set the stage for long-term fiscal stability.
The Transportation Committee approved SB 1059, and as of press time the bill was still awaiting action in the Senate.
If changes are not made now, when the state is in a fiscal crisis, then Connecticut could miss the opportunity for long-term spending reforms that allow us to compete with other states.
Businesses are concerned that the tax increases in the new state budget are large and problematic for an economy in the early stages of recovery. A $1.5 billion tax increase is a major diversion of money from consumers and the state”™s economy.
In particular, the income tax hike will hinder the growth of small and midsize companies, which pay their business taxes through the personal income tax.
Many of the recommendations in SB 1059 introduce efficiencies into state government that could help offset some of those increases:
- Reduce the span of control of managers to employees in state government from 1-6 to 1-10;
- Establish a Lean Government Steering Committee and increase lean efforts in state agencies;
- Continue the deinstitutionalization of state residential facilities;
- Create a planning committee to help drive changes in how Connecticut provides long-term health care;
- Adopt a long-term health care rebalancing strategy;
- Pursue Medicaid waivers to reduce long-term costs;
- Review medical usage in state programs, such as for prescription drugs;
- Coordinate efforts to maximize federal reimbursements;
- Expand the use of technology to provide more e-government services; and
- Help agencies strategize and institute changes to save energy.
Connecticut is far from out of the woods, as the new state budget, union concessions agreement and latest unemployment rate illustrate. Adding to our economic worries are continued concern over both European and U.S. debt levels, as well as political unrest in North Africa and the Middle East and other shocks that have caused near-record high gasoline prices.
Given the size of the new state tax package, any additional savings to offset those increases would be welcome in this weakened economy. By streamlining state government, SB 1059 not only makes sense now but also helps defuse future fiscal problems.
Peter Gioia is vice president and economist at the Connecticut Business and Industry Association in Hartford. Reach him at pete.gioia@cbia.com.
