Writing in National Review, Red Jahncke, president of Townsend Group International and a Connecticut political
columnist, advises that Republican members of the General Assembly should not
sign off on what is being called a compromise budget, because a solution to
long-term financial obligations -- AKA “fixed costs” -- has been excised from
the only budget to have passed in both Houses of the General Assembly, a
Republican production.
“There is actually one document,” Jahncke writes, “which
provides insight into the fundamentals driving the state’s fiscal
deterioration: the Executive Order Resource Allocation Plan for Fiscal Year
2018 by which Malloy has been running the state since July 1 in the absence of
a budget.”
“The Order projects fixed costs will increase $800 million, or 9 percent, in FY2018, to $9.6 billion. Here’s the rub. If overall spending must be cut $800 million and fixed costs are rising $800 million, spending on “everything else” must be cut $1.6 billion. Well, spending on everything else was $9.6 billion in FY2017, so a $1.6 billion cut amounts to a whopping 17 percent reduction in all other government services.
“The real issue is not spending on overall ‘fixed costs,’ but rather spending in one subcategory, namely, state-employee benefits and the teachers’ pension fund, which is skyrocketing from $2.9 billion to $3.4 billion, or 18 percent. That $500 million is two-thirds of the total increase in ‘fixed costs.’ The $3.4 billion doesn’t include salary and wages for active employees, which are running very roughly $4.5 billion according to Malloy’s summary of the labor-deal extension that he negotiated and jammed through the assembly on a strict party-line vote. So, public-employee pay and benefits account for almost half of all state spending under the Order.”
Any policy prescription that does not attack and reduce “half
of all state spending” dooms the state to a perpetual cycle of debt repetition.
The problem in Connecticut, in other words, is not how can the budget best be
balanced -- usually by a combination of tax increases and spending reductions -- but rather how can the state permanently reduce fixed costs? The SEBAC-Malloy
contract agreement pushed unreformed fixed costs far into the future. Republicans
wanted to reform the deadly cycle by replacing contracts with a statutory process that would have restored to legislators the means by which they could in the
future reclaim control of their budgets. Republicans opposed the SEBAC-Malloy
deal to a person, but it was powered through the General Assembly by superior
Democrat numbers and a misdirected Connecticut media.
That battle lost, Republicans produced a budget that miraculously
had been affirmed by the General Assembly, and it was a threatened
gubernatorial veto that has now produced the so called compromise budget, a yeasty
looking donut in which Republican reforms have been lost in the donut hole. The
compromise budget is a Democrat measure that maintains a ruinous status quo.
Taking Malloy’s own numbers as Holy Writ and the numbers in the Malloy Order
are take-it-to-the-bank reliable, the compromise budget solves the wrong
problem (i.e how do we balance a budget?) and removes any possibility that the
right problem (i.e. how do we reduce future fixed costs?) will be courageously
addressed.
It’s been “Groundhog Day” in Connecticut for the last thirty
years. That is how long, with the exception of two years, Democrats have ruled
the General Assembly roost. And every succeeding fiscal year is exactly like
the last. Because the Democrat dominated General Assembly has been playing to
its traditional voting base, rusted party machines in Connecticut’s large
cities and state employee unions, the state’s fourth branch of government,
reforms that might have successfully attacked the engine of our three decades old dissolution have been shelved so that Democrats may retain their seats and
their base of support may be lathered with empty promises.
The tentative compromise budget is a vote for yet another
Ground Hog Day in which no day holds a promise of a different future. And that
is why a sufficient number of reform-minded Republicans and Democrats should
fasten their courage to the hitching post and defy a seeming eternal repetition
of false solutions to serious problems.
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