Budget chief confesses nothing was fixed

With the election safely out of the way by a couple of weeks and Governor Malloy and the Democratic administration returned to power, it has been disclosed that the state budget is facing a deficit of about $100 million and state budget director Ben Barnes has remarked that state government seems to be in “a period of permanent fiscal crisis.” Many items in the budget will have to be cut at the governor’s discretion where the law allows.

Of course Barnes’ comment and those cuts might have been even more interesting if they had come before the election.

Also coming just after the election was the announcement from the state Public Utilities Regulatory Authority that electricity generation charges from the state’s two major utility companies will increase 27 and 54 percent. Such an announcement before the election would have invited a campaign discussion of energy policy, even if the candidates would have declined the invitation as they declined most invitations to discuss policy.

So people will just have to shut up and pay, which is what most voted to do — to have everything about state government continue as before — even if the political system produced only what most considered horrible choices.

But reflection on the “permanent fiscal crisis” might be good in anticipation of the next election, distant as it is. For if state government’s fiscal crisis is permanent, as budget director Barnes senses, it is because state government continues to fail to get control of its finances. 

Control was supposed to have been accomplished with enactment of the state income tax by Gov. Lowell P. Weicker Jr. and the Democratic majority in the General Assembly in 1991. The resulting tax increase was massive and devastating to the state’s economy, which never recovered, in part because state government never put controls on spending. Indeed, state government left it illegal to control most spending, state and municipal employee costs having been removed from the ordinary democratic process through collective bargaining and binding arbitration of public employee union contracts. 

With control of spending outlawed, state government soon was resorting to accounting tricks to conceal its worsening insolvency and unfunded liabilities.

After 20 years the tricks could no longer conceal enough and responsibility for the mess fell to Governor Malloy. But Malloy responded only as Weicker did, with a massive and devastating tax increase that preserved all the prohibitions on controlling spending and all the mistaken premises of spending policy. Meanwhile the governor has darted around the state bestowing hundreds of millions of dollars on discretionary projects, from corporate welfare to “farmland preservation,” as if Connecticut, continuing its economic decline, is in any danger of overdevelopment. 

Now the governor faces not only the current budget’s revenue shortfall, which can be closed through executive discretion, but also what seems likely to be a billion-dollar shortfall in the next budget, which can be closed only by dashing many dearly held expectations.

In short, contrary to the governor’s campaign claims, which echoed the false claims made for the income tax 20 years earlier, state government’s finances, as budget director Barnes has just confessed, are not even close to being fixed. And though the governor says he can manage the next budget without raising taxes, the state colleges and universities are already planning to raise tuition, as if that isn’t effectively a tax increase on students and their parents. 

Meanwhile compensation for college and university employees is being increased, and since government employee unions are the biggest part of the Democratic machine, that compensation can’t be cut or even merely frozen. No, state government’s main objective remains only to feed itself.

Chris Powell is managing editor of the Journal Inquirer in Manchester.