Buried under the pile of wreckage that is the Connecticut state budget is a secret incumbents of both parties don’t want you to know. Even if there had been no fiscal meltdown in the fall of 2008, chances are better than good that Connecticut would be facing a severe budget deficit today.
The problem began a few months after the 2006 gubernatorial election when Gov. M. Jodi Rell proposed a dramatic increase in education spending and suggested it be paid for by raising the income tax. The ramifications of that shocking move are still being felt today.
The governor’s proposal was shocking for two reasons. First, in order to justify a big increase in spending, she claimed there was an emergency in education in Connecticut that could only be dealt with through a massive infusion of cash. This was a surprise. There had been no signs of a crisis. Candidates had been running for years on the idea that Connecticut has one of the best education systems in the country and they still make that claim in campaigns today.
The second shock was related to the governor’s proposal to raise the income tax at a time when it was considered likely the state would finish the year with a budget surplus. Republicans were particularly upset and there was a mini-revolt against the governor within the party. It culminated toward the end of the legislative session when House Republicans, led by Larry Cafero, demonstrated the governor’s school spending plan could be implemented without a tax increase. Great!
The governor, moving to quell the uprising, quickly agreed and has been against tax increases ever since. But there was a problem hidden in the numbers. When the state tries to rescue education, it does so by sending more money to cities and towns to be spent locally. This is very popular with legislators, because it allows them to claim credit for bringing home the bacon. Republicans and Democrats could not resist the governor’s call for bigger education grants and approved the budget even though they were building a structural deficit. While there was enough to spend the extra money in 2007, there wouldn’t be in 2008 and beyond and everyone knew it. Only a handful of House members and one senator voted against the final bill. They were scorned.
Jump forward one year to the spring of 2008. Although deficit clouds were on the horizon, it was an election year and no one wanted to make any difficult decisions. The governor suggested making no changes to the budget — despite the apparent problem — and Democrats readily agreed.
Two years. Two irresponsible decisions on the part of those in power. As political luck would have it, they just may get away without having to accept responsibility. Their mismanagement probably put the state in the red by $1 billion to $2 billion. Absent the fiscal meltdown the entire country is experiencing, it would have been a big political problem, but as the situation presents itself today, it is pocket change. The combined deficit for the next two years is $8 billion or more.
We should care about all this, because the same people are still in charge. The governor who manufactured an education crisis so she could raise taxes is now refusing to raise taxes in the face of the biggest deficit projections in state history. The legislative leaders who willingly ran from their responsibility in each of the last two years are looking to cast blame.
With this track record, there is every reason to believe this group is only capable of making matters worse.
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Dean Pagani is a former gubernatorial advisor. He is V.P. of Public Affairs for Cashman and Katz Integrated Communications in Glastonbury.
