Package No Prize • Gov. Rell lets Democrats' plan become law
September 02, 2009
Gov. M. Jodi Rell was wise Tuesday in bringing to an end her long fight with legislative Democrats by holding her nose and letting their latest budget bill pass into law without her signature. She doesn't like the budget but she was right in concluding it isn't worth it to prolong the stalemate.
In truth, it isn't a very good budget. There is far too much borrowing to make it balance and too much spending. But Connecticut needs a state budget. Other than Pennsylvania, this had been the only state without a budget for the current fiscal year, which is now in its third month.
The governor contributed heavily to the delay by low-balling for months the size of the projected deficit for the two-year budget period, making it difficult for the two sides to agree to any formula for a balanced budget. They only recently came to terms on a deficit figure.
But now Mrs. Rell and the Democrats have broadly compromised — although she refuses to use that term — on several of the key items that have kept them apart. It's hard to see how much more of significant value could be gained if she had vetoed the bill passed by the House late Monday night and the Senate in the dark hours Tuesday.
She took the big leap first, showing admirable flexibility, by agreeing last week to the Democrats' insistence on the "millionaire's tax" to raise revenue. The Democrats followed by partly accepting her demand for relief from the estate tax and by adopting her proposal for a reduction in the state sales tax — although they added a provision that the sales tax cut would be repealed if revenues dropped more than 1 percent from projections.
The Democrats' budget also reflected additional spending cuts of $407 million — not the $520 million the governor had sought, but fairly close in the context of a two-year spending total of some $39 billion.
Connecticut taxpayers deserve a better product, but at this late date it's doubtful they could get it.
This budget doesn't fundamentally restructure state government to save money, as is needed. When the governor made her deal with the state employees unions that promised no layoffs for two years in exchange for contract concessions that would save about $600 million, hopes for meaningful restructuring flew out the window.
Some of the ideas that were proposed, such as breaking up the state Department of Motor Vehicles or eliminating largely volunteer boards and commissions, offered the appearance but not the substance of reform. More substantive ideas, such as closing an entire prison, were given short shrift. Neither side covered itself with glory in this painstaking process.
Considering the economic crisis facing the state, it's a sin that state government will be spending more money this biennium than last. Democrats protected many of their favorite social programs, were kinder to cities and towns than even the municipalities thought they would be, and stuffed some earmarks into the bill — $1 million for a Yale study on preventing seniors from falling down, for example — that we can't afford.
Thankfully, Mrs. Rell will use her line-item veto authority to get rid of about $8 million of those earmarks.
The budget is relying too much on too few people — joint filers making more than $1 million and single filers making more than $500,000 — in raising additional revenue to balance the budget. Connecticut does not want to reach the point where high-earner flight to Florida or other non-income-tax states becomes more than anecdotal.
Future tax increases — if there need to be any — should be broad-based. The sacrifice ought to be shared. With the state facing one of the worst deficits in living memory, it's hard to justify the fact that nonsmokers making just under $500,000 a year could pay less in taxes next year than they did this year.
Having delayed some hard decisions and having used all the one-shot revenues in sight and having borrowed to the hilt for this budget, lawmakers and the governor are going to have to start thinking early on how the next biennial budget is put together.
Unless the economy improves miraculously, disaster awaits.
Reprinted with permission of the Hartford Courant.
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