Despite Rosy Talk, Budget Is Full Of Holes
By Rep. Lawrence F. Cafero
Jr. of Norwalk, the Connecticut House Republican leader. The Hartford Courant, February 12, 2012
Two questions to consider following a month's worth of
fiscal analysis and revelations regarding the state's budget, which has set a
record for tax increases.
Is Connecticut's
fiscal health robust and balanced as the Malloy administration has consistently
insisted, despite recent disturbing evidence to the contrary? Or are the
state's lingering fiscal woes — the $145 million budget deficit, our dismally
funded public pension plans, anemic revenues, phantom savings, dangerously low
cash balances and the downgrading of Connecticut's credit rating — outlined by
independent experts and financial professionals, accurate?
Someone is wrong. The experts who delivered jarring fiscal
assessments of this budget were dismissed out of hand by Gov. Dannel P. Malloy for weeks. But as January turned to
February and the sour fiscal reports piled up, he pivoted and blamed others for
Connecticut's
fiscal condition — whatever it is.
In between the governor's trips to Washington, D.C.,
for political fundraising efforts and his highly touted, privately financed,
world economic summit sojourn — at a Swiss Alps resort — Connecticut received a
barrage of bad economic news from a variety of sources.
On Jan. 3, State Treasurer Denise Nappier
released a report indicating that Connecticut's cash on hand had dwindled to a
record low, good enough to pay our operating bills for less than three days. Nappier also admitted for the first time that her office
borrowed money to pay for those operating costs; salaries, electric bills and
the like. Falling revenues were to blame.
Budget chief Ben Barnes said critics did not know what they
were talking about or understand how the budget process works. Treasurer Nappier also denied she wrote what she wrote in her report.
(She issued another report Feb. 2 showing the cash balances had actually gotten
worse.)
The bad news continued on Jan. 16 when it was revealed that
the agreed upon budget surplus was just over $1 million and not the $83.7
million the governor announced in December. Just four days later, Moody's
Investors Service downgraded the state's credit rating, citing, among other
things, huge holes in the governor's pension funding plans and escalating
health care costs.
In short, Connecticut,
despite raising taxes by $1.8 billion just months ago, continues to struggle
financially because spending continues unabated and revenues continue to
decline. Much of the savings built into the budget — $180 million in employee
suggestions, $205 million in health care and $90 million in technology — are,
to date, fiction.
Mr. Barnes' retort caught many by surprise. "Moody's is
wrong in its analysis of the state's finances, and wrong to change
Connecticut's credit rating,'' he said. Democratic Treasurer Nappier weighed in, curiously calling the downgrade,
"not unexpected.''
Gov. Malloy responded to the downgrade one working day later
on Jan. 23 with a new proposal to pre-pay pension obligations by $125 million
yearly to help eliminate the unfunded liability over 20 years. Gov. Malloy has
not indicated where the money might come from.
Just two days later, the nonpartisan Office of Fiscal
Analysis declared that the anticipated budget surplus had turned into a $145
million deficit.
Two days after that, OFA declared that the pension fix and
reforms Gov. Malloy hatched last summer with the state union leadership was
$3.1 billion short of the anticipated savings. Mr. Barnes again castigated OFA
in an unprecedented manner, saying it was not qualified to render such
analysis.
Gov. Malloy concluded the month by blaming whatever fiscal
woes that exist on the Republican governors who preceded him, ignoring the fact
that Democrats have
controlled the General Assembly for 36 out of the last 44 years.
The public might rightfully ask, "What is going on?''
What is clear is the danger of abdicating legislative
budgeting authority solely to the executive branch as Democrats did. We hope
that Gov. Malloy was right when he predicted the state will finish the year in
the black. But we have to be prepared for the worst.
Connecticut will have little
patience for elected officials who blame others for problems they were hired to
resolve. Now it is time for the legislature to take back that responsibility
and come up with lasting solutions to our ongoing fiscal instability.
Rep. Lawrence F. Cafero Jr. of Norwalk is the House
Republican leader. http://www.courant.com/news/opinion/hc-op-cafero-connecticuts-fiscal-reports-at-odds-0-20120212,0,5718410.story