If businesses and taxpayers were looking for a long-term solution to the state’s future budget woes, it appears Republicans don’t have the answers — at least right now.
The GOP recently offered an alternative fiscal 2015 budget to the one pitched by Gov. Dannel P. Malloy earlier this year; it spends $54 million less, eliminates some gimmicks, and pays down a larger portion of Connecticut’s long-term debt.
Those are all good things, but the Republican’s budget fails to provide a long-term framework that tackles a looming $1 billion deficit in fiscal 2016. That, of course, could have more to do with politics than policy. As we head into an important fall gubernatorial election, a long-term budget vision that suggests major spending cuts or a tax increase likely won’t curry favor with the electorate.
Still, Republicans and Democrats owe taxpayers an explanation on what service cuts or tax increases to expect if the nonpartisan Office of Fiscal Analysis’ deficit projections hold true. Neither party has been willing to address the issue, underscoring the challenges Connecticut faces in getting an honest assessment of its economic future.
The GOP’s budget does offer some worthy ideas. It, for example, scraps Malloy’s ridiculous proposal to offer $55-per-person tax rebates, in favor of spending more of this fiscal year’s projected budget surplus to pay down long-term debt.
While debt reduction isn’t a sexy campaign talking point, shrinking Connecticut’s long-term obligations will do more to boost business confidence than a cash rebate that barely fills a tank with gas. The GOP spending plan also restores transportation funding and offers modest tax relief to businesses by eliminating a temporary $60 million unemployment insurance compensation assessment on employers.
Malloy and the Democratic legislative leadership should incorporate some GOP ideas into the state budget. Unfortunately, that’s not likely to happen. Republicans hold little political power in the state right now. If the GOP wants to change the political landscape, the party’s leaders — and its gubernatorial hopefuls — must offer a grand vision to restore the state’s economic and fiscal competitiveness.
Their latest budget proposal falls short.n
Hartford’s budget puts more pressure on businesses
Speaking of budgets, Hartford Mayor Pedro E. Segarra pitched last week his latest spending plan for the Capital City.
And for the business community, it’s not great news. Segarra has proposed a $557.4 million budget for fiscal 2015 that includes raising the city’s highest-in-the-state mill rate 3.4 percent, to 76.79 mills.
The budget plan increases overall spending by $18.6 million, although some departments would see funding cuts. About 99 city “positions” would be eliminated, but most of those jobs are currently unfilled. Segarra blamed rising pension and other benefits costs for a large portion of the spending increase. Meanwhile, Segarra’s budget also counts on $34.5 million from selling off city parking assets. Such a move signals the desperation City Hall faces in trying to close a projected $44 million deficit. While many U.S. cities have toyed with the idea of selling public assets to generate quick cash, it poses serious long-term threats by shutting off future revenue streams.
Segarra has worked hard to keep the city’s mill rate in check, but his proposed tax increase is a step in the wrong direction, particularly at a time when the central business district is gaining momentum with new employers and apartments. However, rising pension costs, state mandates, and collectively bargained contracts leave little financial wiggle room.
It’s not easy being a city mayor these days.
