Despite all the hand-wringing about the plight of state and municipal budgets here in Connecticut, it’s clear we are not alone in our pain. There are interesting and potentially instructive lessons playing out all around us.
In New York State, for example, a state budget stalemate has governmental operations hanging by a thread. Weekly emergency appropriations are keeping the lights on. The courts have blocked the governor’s idea of furloughing state workers so now David Paterson is threatening massive layoffs. Neither party likes his budget proposals, but they haven’t been able to agree on a compromise since missing the April 1 deadline. An entire shutdown of the government was averted June 14 by just two votes but, until there’s some resolution, the threat returns each Monday.
Powerful state employee unions seem to be shaping the discussion; political posturing abounds; the taxpayers and business go unheard.
If all that seems eerily familiar on the state level, consider the municipal drama unfolding in Rhode Island, where the pesky case of Central Falls is working its way through the courts.
The small city has thrown up its hands trying to find a way to balance its budget, citing falling state aid and rising pension obligations. Sound familiar?
Faced with a $3 million hole in an $18 million budget, Central Falls put itself into receivership. That prompted the legislature to set up a three-tiered review process to block such a drastic step and applied it retroactively to Central Falls.
The issue really turns on discouraging municipalities from tossing their problems into the judicial process where contracts can be broken. That would be a killer for the municipal bond market, not to mention for the employees counting on pensions.
For Connecticut, the parallels are scary. At some point, somebody is going to have to make some tough decisions to avoid meltdowns at both the state and municipal levels. The right forum is the legislature. If that doesn’t happen, necessity is the mother of invention. And often those alternatives are ugly, as New York and Rhode Island are proving.
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One of the things that likely will come out of the Legislature’s special session is a stack of veto override attempts plus an emergency fix to that oversight of not extending the authority behind certain property tax levies.
The patch of the property tax problem seems a no-brainer but the veto questions are much closer contests.
The biggest veto under review is the omnibus energy bill. It’s controversial and deserves a much more thoughtful and thorough review. Cooler heads need to leave that veto decision alone.
But one veto that looks like it might be overturned is Governor Rell’s head-scratching decision to block off-track-betting at three restaurants.
Her stated reason — that she objects to eateries going for the quick fix of gambling — is silly on the face of it. The state long ago surrendered the high ground on gambling. Rell herself had no problem advocating adding keno to the lottery’s list of games. And revenue from Indian casinos is a vital part of the state’s budget. So it really can’t be about expanding gambling.
The alternative explanation seems even worse. Is the state now getting into the business of second-guessing business strategy? These restaurants say they are seeking to add some customers at lunch with live horse racing. Whether that strategy works or not, it’s hard to see a compelling state interest in keeping them from trying.
The Legislature should help save Rell from herself on this one and override that veto.
