Wilton letter: CT’s sick economy needs a cure
To the Editors:
One party has controlled state budgets for over 40 years. It has routinely relied on its highest taxpayers along with accounting gimmicks to pull Connecticut from the edge of insolvency.
Accounting gimmicks that allow elected officials to claim balanced budgets while their state sinks further into debt include: inflating revenue assumptions; counting borrowed money as income; understating the true costs of overhead; delaying payment of current bills until the next fiscal year; and, hiding a large portion of employee compensation from the budgeting process.
Doctors know that to make an accurate diagnosis and prescribe effective treatments for a sick patient you first need to get to the root cause of the illness.
Connecticut’s economy is sick and has been on the verge of insolvency more times than I can count. Its symptoms have been felt for years. State leaders have tried to mask them, but they will not go away.
Connecticut has been on the verge of insolvency more times than I can count, free falling from one fiscal crisis to another.
The Tax Foundation ranks Connecticut 47th for business tax climate in 2020. Truth in Accounting “Financial State of the States” report gives it an F rating for its third highest-in-the-nation tax burden of $50,700 per capita and its inability to pay its bills — $16 billion available to pay $83.4 billion worth of bills. Barron’s designated Connecticut 45th in the nation for creditworthiness — “the state with the highest overall debt burden on a per-capita and a gross-domestic-product basis.”
Multiple opportunities to bring Connecticut’s economy back to health are disregarded. Just this July, the governor refused to delay huge state raises and paid millions more than federal or contractual limits in pension benefits until the pandemic is over, while the private sector falters.
This time, however, accounting gimmicks and the fully funded Rainy Day account that was mandated to be filled by Republicans in 2017 will not save them from Connecticut’s dire circumstances. Even before the COVID-19 pandemic hit, budget analysts projected Connecticut would face a flood of red ink in 2021-23 — more than an $8-billion deficit.
Worse yet, state economists do not see a turnaround for over a decade. This month, the Connecticut Center for Economic Analysis warns, “It looks bad. Connecticut has still not recovered all of the jobs lost from the Great Recession. A reckoning is coming if we don’t change the trajectory.”
Now that we have diagnosed the cause, what is the cure? It is certainly clearer than a cure for the virus. State leadership must face the facts and fix the problem. They must find the courage to speak honestly with state labor unions and bring them back to the table; show them the mountain of red ink that threatens their economic future; negotiate costs and pension reforms that more closely resemble the private sector or even neighboring states; and, reduce the taxes driving out those who foot the costs. That is it, plain and simple!
Former state senator