The below opinion is that of the writer and does not represent the opinion and views of Canaiden LLC, its associates and entities.
Budget Director Ben Barnes recently presented the Office of Policy and Management's annual Fiscal Accountability Report to the General Assembly's Appropriations and Finance Revenue and Bonding Committees. I joined my colleagues on the Finance committee to listen to Sec. Barnes deliver some very unfortunate news about Connecticut's current financial state.
According to the latest reports, the state's current fiscal year faces a $365 million budget gap and the next fiscal year, beginning July 1, 2013, is nearly $1.2 billion in deficit. The reports presented to us also predicted that the deficit is expected to continue into the next two fiscal years giving Connecticut an estimated $3 billion deficit through 2016.
After Governor Malloy's first budget proposal was passed by the legislature, the people of Connecticut were promised higher taxes, reduced state spending and concessions from state employees would be enough to solve our state's fiscal crisis, but unfortunately, these solutions did not amount to what was projected and Connecticut's financial and economic condition went from bad to worse.
Instead of Gov. Malloy and the majority party in the legislature reducing our state's spending, expenditures actually increased by $1.4 billion (a 7% increase) over the past two years. And to make matters worse, revenue from multiple sources declined, including savings from the "Employee Suggestion Box" and the Technology Initiatives which were projected to amount to an estimated $280 million. Additionally, our state collected less tax revenue than expected, including less corporation tax revenue, and a dramatic decrease in the revenue from the state's casinos. This was coupled with a growth in Medicaid enrollment, costing the state $260 million more.
State Comptroller Kevin Lembo recently announced Connecticut is now facing a shortfall of $415 million for this year, $50 million more than a month ago. Just recently, State Treasurer Denise Nappier gained approval from Gov. Malloy to borrow an additional $550 million to once again cover our state's operating expenses.
These new numbers clearly indicate our budget deficit cannot be fixed by inventing new taxes and increasing the taxes we already have in place. Ignoring our over-spending and unfunded pension liabilities has put Connecticut in a very vulnerable condition, and we can no longer afford to keep pushing our problems aside.
The upcoming special session and the 2013 regular legislative session is a great opportunity for the executive and legislative branches to work together to create a real solution to the issues we are facing.
Last year, my Republican colleagues and I created a no tax increase budget which was vetted by the nonpartisan Office of Fiscal Analysis to help solve the state's budget problems. With our current economic and fiscal policies failing us, it's time we turn in another direction - one that centers on responsible budgeting, spending within our means and getting our economy back in gear. Our alternative budget was based on these ideals and I believe a bipartisan solution that includes these principles will help solve Connecticut's fiscal crisis.
I will continue to fight for what's best for the families and businesses in Stamford and throughout the great state of Connecticut. Right now, we need a common sense approach to our state's budgeting process. The hardworking tax-payers of this state deserve to have a state government that works within its means and I will keep working towards this goal.
It is my duty as your State Representative to bring your ideas to Hartford. If you have any questions, concerns or thoughts, please do not hesitate to contact me at my office by phone 800-842-1423, or by e-mail Michael.Molgano@housegop.ct.gov.