Connecticut’s next governor shouldn’t expect a very a long honeymoon period.
A recent report by the legislature’s nonpartisan Office of Fiscal Analysis said the winner of next year’s governor’s race will be greeted with a $1.1 billion budget deficit.
That means talk of spending cuts or tax increases likely will dominate the campaign trail in 2014. Beyond the rhetoric, the numbers indicate Connecticut state government still is living beyond its means. Just a few years ago Gov. Dannel P. Malloy inherited a $3.2 billion budget deficit, which he solved with a mix of spending cuts and $1.5 billion in tax increases. But even the state’s largest-ever tax hike hasn’t proven to be a long-term fix to state government’s financial woes.
The state’s slow moving economic recovery is largely to blame for OFA’s projected $1.1 billion deficit, which predicts lower than expected income tax and casino revenues. Malloy’s budget office predicts a smaller $600 million deficit.
Regardless, Connecticut can’t afford another historic tax increase, nor should it borrow more money to pay for operating expenses; both would have a continuing detrimental impact on the state’s long-term economic prospects.
We also won’t advocate for slash-and-burn budget cuts, but policymakers must find real ways to trim expenses. One possibility is outsourcing more government services to lower cost nonprofit providers. It’s a move that won’t be popular with state employee unions but can help rein in government largesse. To his credit Malloy has pursued government efficiency initiatives to reduce costs, including consolidating dozens of state agencies. It’s not nearly enough. Connecticut’s budget woes demand big-problem-solving ideas. Let’s hope next year’s gubernatorial candidates bring some to the table.
CT, outside the fishbowl
What’s the saying about your career? The most important decisions about you are made when you’re not in the room. Something like that anyway.
Thanks to former Hartford Business Journal editor Norm Bell setting up a Las Vegas bureau — and taking advantage of the Nevada resort city’s never-ending stream of industry conventions to contribute some articles to his old publication — we are getting some insight into how Connecticut companies think and act when we’re not in the room.
Looking around the National Business Aviation Association convention, Bell noticed that Hartford mainstay United Technologies Corp. had a big presence, prominently showcasing many of its product lines — except those based in Connecticut. Sure, Pratt & Whitney’s tool service was on the exhibit floor, but it was dwarfed by Pratt’s Canada division. UTC’s new North Carolina aero business also had a large display.
Does this mean UTC is moving its headquarters to Charlotte or Canada? Probably not, but it’s interesting to know which businesses UTC showcases on a national stage; and many of them no longer have a Connecticut home address. In fairness, United Technologies is a global conglomerate so it shouldn’t be a shock UTC would display a range of its companies. Still, it’s a stark reminder that UTC’s presence here can’t be taken for granted. And sometimes it takes a view from outside the Connecticut fish bowl to see that more clearly.
