Monday, February 2, 2009
The Governor's Speech
The governor was on TV today, telling everyone how resilient we people of Connecticut are and how the new budget to be formally introduced in Wednesday will be pretty painful. The speech was short and consequently short on details, but had three important points to pay attention to.
First, the budget will have cuts. Big cuts, for the tone of what the Governor said. That's not a surprise, considering the very dismal situation of the state budget. It is important to point out, however, that despite the usual talk about efficiency and making government smaller because "we can't afford what we have" Connecticut has a pretty average public sector. Actually considering how wealthy the state is, the problem might be that we have a regular-size state budget but a pretty dismal appetite to tax according to it.
Which brings us to the second point, the no new taxes part. Raising taxes across the board during a recession it is indeed a fairly bad idea; the problem in Connecticut, however, is that a strong cuts-only, no new taxes position could indeed mean new taxes somewhere else. This is speculation on my part, but if the state cuts the money for education or PILOT (payment in lieu of taxes; the state's way to compensate towns that host non-profits) this would just shift the burden to local governments.
This would comply with the no increase in taxes on the state side, but would just put a lot of pressure on cities and towns to either raise property taxes or cut budgets even more harshly. We already pointed out that the property tax system is actually pretty terrible; anything that increases the state reliance on this tax is a bad idea. We will get back to it when the full budget is unveiled, just to see if this is actually going to be on the proposal.
Third, we at 1000 Friends have some good, detailed proposals to get the state out of this crisis stronger and better prepared to the challenges of tomorrow, so let me insert a shameless plug to our legislative agenda. The state should try to focus its priorities on growing smart, not just on seeing what can go to the chopping block in cuts that always hurt the same people.
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Yesterday, the Governor brought David Osborne of Reinventing Government fame to speak with legislators about the need to look at what government should do, how much money we want to raise, what programs have the biggest impact and their costs, and eliminating low-impact programs. You can hear his address on CTN at mms://ctnv1.ctn.state.ct.us/B/budget_forum_2-2-09.wmv
ReplyDeleteA coalition introduced a Blueprint for Connecticut's Future that recommends strategic cuts, enhancing revenue, using the federal stimulus and the rainy day fund, and reducing tax credits. Read the Blueprint at: www://ctblueprint.org.
The Better Choices for Connecticut coalition released its recommendations to eliminate the projected deficit through targeted increases in the income, sales, and corporate taxes, tightening up tax expenditures, and using the federal stimulus and the rainy day fund. Read more at http://www.forbes.com/feeds/ap/2009/02/02/ap5996780.html.
The budget is bleak, fortunately there are many smart, creative people looking for solutions. Let's work together to embolden our legislative and gubernatorial leadership to be tough and act in our long-term best interest.