Beware of Election Year “Surplus”

[box]By State Senator Len Fasano[/box]

The State of Connecticut has bills to pay; lots of bills. We have roads, schools and hospitals to maintain, police and public works employees to pay, prisons and public institutions to guard, public lands and drinking water to preserve. We have lots of bills.

The state has also accumulated a pretty big credit card bill. In fact, outstanding debt grew by an incredible $1.1 billion under Governor Malloy.

To be sure, the state of Connecticut wastes a lot of money too. Government bureaucracy is costly and we could save money, or put it to better use, if we employed private companies to perform some public duties more efficiently and at a lower cost. As one example, we maintain the region’s only state-run children’s psychiatric hospital where the cost of caring for a patient is about double what it would cost for a private non-profit institution to provide the same quality of care.

Nonetheless, we still have lots of bills, and those bills, like your home utility bills, recur month after month, and year after year.

Knowing this, a responsible state budget would account for the annual recurrence of those bills. But, here in Governor Malloy’s Connecticut, that simply is not the case.

For a couple of weeks Governor Malloy has been celebrating what he calls a “$506 million budget surplus.” What he usually fails to mention is that the state is facing a $2 billion (with a “B”) deficit in 2016 and 2017. What is worse is that the governor is already rumored to be planning to spend that surplus on an election-year tax cut to compensate for the political and economic failure of having passed the largest tax increase in state history just three short years ago. What the governor is betting on is that your memory is even shorter.

First of all, the governor’s surplus is built on a house of cards. It is the result of using more than $865 million worth of one-time budget items (savings and revenue that we can never count on again) including skipping payments on debt for two years, raiding the special transportation fund, and borrowing additional money to pay for the day-to-day operation of government. This last gimmick is akin to using your credit card to pay your utility bills and then growing that debt by failing to pay the credit card off on time. That’s how the governor built his $506 million “surplus.”  That is also a chief reason why the state will soon face a $2 billion deficit.

Since we cannot take back the irresponsible decisions made by the governor that led us to this point, let us just deal with the facts as we find them:

  • We have $2 billion in bills to pay next year and the year after
  • We have a $506 million surplus that was manufactured by adding to our debt
  • Outstanding debt grew by an incredible $1.1 billion under Governor Malloy

The $506 million surplus the governor is celebrating does not look so big compared to the looming deficit he has saddled taxpayers with and the record debt he has accumulated; does it?

Isn’t the only responsible way forward one that uses some of the surplus to reduce outstanding debt, while at the same time eliminating government waste and making additional spending cuts to offset the rest of the state deficit?

If we prioritize carefully, I believe there is also room in the budget for tax relief, particularly for seniors, small businesses and middle class taxpayers. There is no question that after being saddled with Governor Malloy’s record tax hike we deserve it. I also support using any additional surplus to replenish the state’s rainy day fund for use in times of emergency. But, please do not be fooled by those who promise tax relief in this election year only by adding to the deficits we face next year and beyond.

State Senator Leonard A. Fasano (R-34, the Senate Minority Leader Pro-Tempore, represents the communities of Durham, East Haven, North Haven and Wallingford.

Posted by Chris

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