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Next Year's State Budget Crisis Starts Now

Dan Haar

May 06, 2010

The Greeks gave us democracy 2,500 years ago and now they're showing us what a real fiscal meltdown looks like. Civil servants are marching on the streets to protest cutbacks. But the jig is up Greece is out of cash.

Connecticut should take note, as Democratic lawmakers and the Republican governor celebrate another state budget pasted together with IOUs and chewing gum, postponing doomsday. They blew a chance to do something responsible.

No, we're not defaulting on our debt and, no, the state's public employees are not facing draconian cuts. But like the modern Athenians, we just can't seem to make hard choices until it's too late.

As cleaning crews sweep up from the hoopla at the Capitol, Connecticut has a "balanced" budget and a time bomb: one year until we hit a $3.8 billion shortfall that threatens to send the state back into recession.

Here's the problem: When a private enterprise cuts staff, it reorganizes, everyone picks up and the business basically keeps doing what it did. But at the state, every staff reduction must be tied to a reduction in services. Why?

There are differences that offer good reasons we can't just slash state payrolls to make up a shortfall. Businesses can stop doing things, like a restaurant eliminating menu items. The state tends to offer services such as locking up crooks, which society doesn't want to lose.

Paul Filson, director of the union that represents more than 20,000 state employees, compares the situation to a hospital. Would you rather have surgery at one that's fully staffed, or one that has cut its workforce sharply?

"You could run the state with fewer people. You could do it worse," said Filson, state director of the Service Employees International Union. "But what happens is, the roads don't get repaired, the bridges don't get inspected."

Raising taxes can only go so far, as we sap smokers and multimillionaires. So we're stuck, right?

Wrong. Starting today, the state has a moral obligation to prepare for next year's crisis by figuring out ways to cut spending without affecting services. It's not a matter of the old cliche, finding waste in government. It's about changing the culture and, yes, eliminating some jobs, then giving those who remain the intelligent support they need.

Larry Cafero, the state House Republican leader, rails against the annual fakery in the state budget. Cafero, a lawyer, rattles off management idiocies, like the fact that we can't standardize payroll processing because some state units pay weekly, others bi-weekly, others monthly.

The numbers tell a shameful story:

In a $19 billion budget, we had a $1.7 billion gap to fill for the fiscal year that starts July 1. We did it by assuming we'll get another $366 million in federal stimulus money; shirking on a $100 million payment to the state employees' pension fund; inventing a $140 million surplus in the current fiscal year, mostly by shifting money around; and the big nut, selling $996 million in bonds.

To pay back those bonds, we'll have to steal $136 million a year from electric ratepayers, including $28 million a year from a fund designed to help residents and businesses improve energy efficiency.

Oh yes, there was a grand total of $31 million in real cuts "tough spending cuts," as a triumphant press release Wednesday evening called them.

That won't do the trick next year, when we're fresh out of federal bailouts and utility funds.

Last summer, state House Majority Leader Denise Merrill convened a panel to devise a jobs bill for the long haul.

It worked, combined with some ideas from Gov. M. Jodi Rell. This summer, we need a similar panel to rethink state management culture. It is not a partisan problem, it doesn't depend on who wins the race for governor, and next winter's legislative session will be too late.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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