The Wrong Way Out

The budget deficit is getting larger again. It’s up to $338 million, says Comptroller Nancy Wyman, and that’s with the meager cuts made by the legislature factored in.

Two things about this article that are worth pondering:

Wyman again called on the Governor and the legislature to address not only the current revenue shortfall, but an additional $500 million “structural deficit” that has been created by using prior years’ surplus funds to pay for current expenses.

This is something we don’t hear much about, but I’m glad Wyman has brought it up. Using one-time revenues, including surpluses, to fund programs intended to be permanent is bad policy.

Secondly, here’s something I didn’t know:

If no plan is created to deal with the overall deficit by the end of the fiscal year June 30, she said, state law requires that any deficit be automatically covered by the state’s Rainy Day Fund, which now stands at about $1.4 billion.

So theoretically, the legislature could do very little to solve the budget problems. The Rainy Day Fund is acting something like a safety net–for this year, at least. There’s not nearly enough in there to fix the state’s yawning deficit for the 2010-11 biennium.

But I can’t imagine the legislature doing that. …Right?

I have to say, their very weak actions last week don’t give me much confidence in their ability to make hard calls. If programs or positions can be cut, cut them. If contracts can be renegotiated with the unions, renegotiate them. If programs/employees absolutely should be kept, then find a way (including raising taxes) to pay for them.

Just don’t pass the buck. There really isn’t much buck-passing room left, anyway.

Source
Stuart, Christine. “State Deficit Continues To Grow.” CT News Junkie 1 December, 2008.

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6 responses to “The Wrong Way Out

  1. Thank God the voters did the right thing last Election Day and voted out all those bums who created this mess in the first place……

    Oh….sorry…..Democrats have been in charge of the CT Legislature for something like 30 years. SuperMajority then….SuperMajority now.

    Well….at least the Democrats can blame George W. Bush.

    Oh, sorry again….I think that excuse is used up as well.

    Genghis…you are correct….we need to cut programs and renegotiate with the Unions. I, like you, expect great things from Union Leader/Speaker of the House Chris Donovan…..he’s our man to get this job done….NOT!

  2. Today’s Courant reported a $700 million deficit. Can anybody explain?

    Is Wyman’s $338 million the difference between $700 and the cuts previously made by the Governor and Legislature? Or is this one of those times where the Comptroller and OPM use different methodologies?

    And as for you – GC – and your suggestion that nothing is happening… you better be careful or someone may “Crush” you!… a near certainty if you start reminding people about Crusher’s $12,000,000 per year slush fund… I mean “discretionary fund.”

    (btw, Rell and Williams get it too. And frankly, why it’s so difficult to eliminate a $36 million slush fund is beyond me.)

  3. The Democrats in the legislature intend to do nothing, because they actually believe that President Obama will fly over the state capitol on a winged charriot of gold, tossing federal grants, bailout cash and other goodies into the state coffers.

    They are going to hold out as long as they can because they are beholden to union and social service special interests that they don’t have the political courage or will to put on notice that it’s time a few less fat bastards ate all the pie.

  4. [quote]If contracts can be renegotiated with the unions, renegotiate them. [/quote]

    Unfortunately, state employees aren’t represented by the UAW, a union that when their members employers are faced with financial disaster has proven they can be both innovative and agreeable.

    (It *is* amazing, but you just can’t mke this stuff up!)

  5. [quote comment=”38900″][quote]If contracts can be renegotiated with the unions, renegotiate them. [/quote]

    Unfortunately, state employees aren’t represented by the UAW, a union that when their members employers are faced with financial disaster has proven they can be both innovative and agreeable.

    (It *is* amazing, but you just can’t mke this stuff up!)[/quote]
    The UAW wouldn’t do much better. It’s one thing to renegotiate when the enterprise is faced with insolvency and unemployment. It’s quite another to do so when you believe that taxpayers will have to pick up the tab regardless of the cost.
    And the last time they renegotiated up there, we got stuck with this absurd 20 year agreement. Be careful what you wish for.

  6. [quote post=”2388″]The Democrats in the legislature intend to do nothing, because they actually believe that President Obama will fly over the state capitol on a winged charriot of gold, tossing federal grants, bailout cash and other goodies into the state coffers.[/quote]
    Connecticut Gov. M. Jodi Rell says President-elect Barack Obama wished her luck in dealing with the state’s growing budget deficit…
    Cool. Maybe there will be a Federal Department of Luck in the next administration.

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