The 2016 Regular Session of the Connecticut General Assembly has come to an end and among the many bills that were passed, one key legislative initiative was conspicuously absent – the Fiscal Year 2017 budget.
At the time that I write this, no formal budget has been presented to the legislature and we have not been given a date for special session. However, pieces of the final document have been revealed through the Finance, Revenue and Bonding Committee as well as media releases. Here are a few of the main takeaways from these revelations:
- Connecticut’s tax base is eroding. The top 50 income taxpayers reported $3 billion less in income than projected – resulting in a “loss” to the state of $217 million in tax revenue from just those taxpayers alone.
- The Democrats balance the budget on the hope that residents increase their drinking, smoking and gambling. They increase revenue projections over the fiscal year by $100,000 from alcohol and liquor taxes, $8 million in tobacco related taxes, $15 million in revenue from Indian casino gambling and $4.5 million in lottery revenue. All these increases in projections are without any substantive changes in policy to justify them. To make things worse, the Democrats also sweep millions of dollars from the Tobacco Health Trust Fund which is supposed to help fund tobacco cessation programs.
- The proposal includes a $46 million increase in “miscellaneous revenue” which is primarily from projections on settlement money through the Attorney General’s office. If the State actually sees this money, which is still very much in doubt, this should be treated as one-time revenue and not used for budgeting.
Overall, I am fearful that these false revenue proposals will lead to record deficits within the next few months.
Cuts to the most vulnerable
The cuts to hospitals are deeper than the original budget put forth by the Democrat majority. This most recent adjustment includes a $30 million state cut to hospitals and creates a total cut of $130 million to hospitals overall.
There is a $1 million cut to the Department of Children and Families for psychiatric clinics for children. There is a $13.8 million cut to the Department of Mental Health and Addiction Services while we face an opioid crisis and consistently preach for expanding mental health coverage. There is a $2.2 million cut to services for the poor and a $580,000 cut to the American School for the Deaf.
Education cuts are deep and wide; with $32.2 million cut statewide to Education Cost Sharing, $4.3 million cut to Special Education and $23.3 million grant for school transportation. Unfortunately, most of these education cuts are simply passing the tax burden on to the local property taxpayer.
There are many flaws with this current budget proposal – both on the revenue and the spending side of the equation. To make things worse, the budget policy lacks the meaningful long-term structural changes that will help address these same issues going forward.
This budget does not require legislative votes on union contracts, does not implement a spending or bonding cap, does not seek overtime accountability and does not provide municipal mandate relief. Conversely, the Republican budget proposal, available at fiveyearbudget.com, provides funding for the most vulnerable and makes long term structural changes that our state so desperately needs – because Connecticut deserves a better budget.