Skip to main content

The Coming State Budget Crunch

The national economic fender bender should introduce a welcomed dollop of sobriety into budget discussions between Connecticut’s major parties.

The Democrat camp, which for several years has argued for a more steeply progressive rate on the incomes of Gold Coast millionaires, has put away its rhetoric, at least for the time being. The millionaires are hurting, and their pain is being felt by redistributionist mayors and congresspersons at the state capitol. Connecticut’s revenues have been diminished by, in Democrat parlance, the parlous financial conditions of the greedy CEOs of Wall Street who are now suffering a well deserved comeuppance. Unfortunately, their setback means that the revenue that poured into state coffers for the last decade and more from dubious financial transaction on Wall Street is no longer trickling down to the big spenders at the state capitol.

Obviously, something must be done. At this point, Micawber’s economic theory kicks in.

“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness,” says Mr. Micawber in Charles Dickens’ David Copperfield. “Annual income twenty pounds, annual expenditure twenty pounds and six, result misery.”

Apparently, no one shared this apercu with the boys on Wall Street busily engaged in a kind of financial alchemy in which worthless mortgages were transmuted into complex financial instruments and sold to idiot buyers. But here we are in Micawberworld; we have come crashing to the bottom of reality’s pickle jar.

And Connecticut, a state that depended overmuch on the good fortune of those who had fortunes, is now hurting – like its millionaires. The projected state budget deficit was $300 million a few days after the mortgage industry went bust. It will rise as the economic tide recedes.

The moral of this sad tale is simple: Any state that lives off the tax dollars collected from, in Democrat parlance, “those who can afford to pay their fair share” will experience revenue contractions when the fortunes of those who can no longer afford to pay their fair share diminish or disappear.

You can’t get water from a stone, not even a rich stone.

The stone sober state Republican Party has called for a forum to discuss and settle upon a means of cutting spending. The state Democrat Party, still suffering from delusions of plenty, has called for – take a deep breath here – a study group to study the problem.

Given the seriousness of the national financial collapse, calling for a study group to recommend ways of cutting state programs may strike some as Neronic; Nero, it has been said, fiddled while Rome burned. And if study groups were around in 64 AD, he would have called for a study group and then fiddled. Actually, the fiddle was not in existence when Rome burned. Nero was an accomplished harpist; so, the metaphor would be more correct if it were said that Nero was harping while Rome burned.

The state legislature is also harping. Republicans want a forum in which participating members – including legislative leaders and enlightened leaders in the state – will decide what to cut and what remedies to apply to staunch the wounds, while Democrats want a study group to audit the Department of Social Services and recommend measures to discharge the deficit.

Concerning the proposed audit, Republican leader Stewart McKinney justly said, “ "Anyone who thinks we are going to audit our way out of this financial crisis," McKinney said, "is either incredibly naive or deliberately trying to pull the wool over the heads of voters."

What’s to study? There is a deficit, the deficit must be discharged, and this can only be done by raising taxes or cutting spending. The national economic meltdown almost certainly precludes raising taxes. And so we are left with spending cuts. The legislature itself, which sets the budget, is a study group empowered to raise taxes or cut spending. So, let it study in the time honored fashion, in open session, and recommend ways of trimming the budget.

Micawber the realist knows that debts unsettled will settle the debtor, and so do Democrat leaders in the legislature.

Comments

Popular posts from this blog

The Blumenthal Burisma Connection

Steve Hilton, a Fox News commentator who over the weekend had connected some Burisma corruption dots, had this to say about Connecticut U.S. Senator Dick Blumenthal’s association with the tangled knot of corruption in Ukraine: “We cross-referenced the Senate co-sponsors of Ed Markey's Ukraine gas bill with the list of Democrats whom Burisma lobbyist, David Leiter, routinely gave money to and found another one -- one of the most sanctimonious of them all, actually -- Sen. Richard Blumenthal."

Dave Walker, Turning Around The Misery Index

Dave Walker, who is running for Lieutenant Governor on the Republican Party ticket, is recognized by most credible political observers as perhaps the most over qualified candidate for Lieutenant Governor in state history.
He is a member of the Accounting Hall of Fame and for ten years was the Comptroller General of the United States. When Mr. Walker talks about budgets, financing and pension viability, people listen.
Mr. Walker is also attuned to fine nuances in political campaigning. He is not running for governor, he says, because he had moved to Connecticut only four years ago and wishes to respect the political pecking order. Very few people in the state think that, were he governor, Mr. Walker would know less about the finance side of government than his budget chief.

Murphy Stumbles

U.S. Senator Chris Murphy has been roughly cuffed by some news outlets, but not by Vox, which published on April 16 a worshipful article on Connecticut’s Junior Senator, “The Senator of State: How Connecticut’s Chris Murphy, a rising Democratic star, would run the world.”
On April 15, The Federalist mentioned Murphy in an article entitled “Sen. Chris Murphy: China And The World Health Organization Did Nothing Wrong. The lede was a blow to Murphy’s solar plexus: “Democratic Connecticut Sen. Chris Murphy exonerated China of any wrongdoing over the global pandemic stemming from the novel Wuhan coronavirus on Tuesday.
“’The reason that we’re in the crisis that we are today is not because of anything that China did, is not because of anything the WHO [World Health Organization] did,’ said Murphy during a prime-time interview with CNN’s Anderson Cooper.”