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| Powell |
Several years ago, this writer had a brief conversation with Chris Powell, then the Managing Editor and Editorial Page Editor of the Journal Inquirer, a fiercely independent paper lately purchased by Hearst.
The question put to Powell was: What should we do about “fixed costs” in the
state budget? Fixed costs, much of it the result of contractual obligations
with state unions, was, then and now, removing control over state budgets from
the legislative branch to the judicial branch, the primary enforcer of
contracts and legal obligations.
Powell’s answer to the question was brief and on point:
unfix the costs, he said.
“With ‘fixed costs’ and government employee compensation now
constituting the great majority of state government expense, and with the
discretionary portion of the budget constituting only a minority,” Powell
wrote in a column published a year ago, “the only way of controlling expense is
to reduce the ‘fixed costs’ and the costs qualifying as ‘fixed.’”
How would unfixing the costs benefit the people of the state
of Connecticut?
It would return to the legislative branch of government
control over a large portion of its budget. Nearly 54% of Connecticut’s fiscal
budgets are devoted to fixed costs, according to a Fiscal Accountability
Report released by the Office of
Fiscal Analysis (OFA). “Connecticut’s fixed costs experienced a
massive increase between 2006, when they accounted for 37 percent of the budget,
to 2018 when it reached the 53 percent mark,” Marc Fitch of the Yankee Institute tells us.
Fixed costs narrow the scope of state government in controlling spending.
They remove large portions of state budgets from the legislature,
constitutionally responsible for getting and spending. This is neither prudent,
nor just, nor constitutional. There are some bright spots in this dismal
picture. The state has been paying down its pension costs, a significant
portion of state debt, “thanks to multiple years of paying off the state’s
unfunded liabilities through the volatility transfer, part of the fiscal
guardrails established under the 2017 bipartisan budget.”
Lately, the guardrails themselves have come under attack from
partisan neo-progressive Democrats who argue that spending restrains in state
budgets interfere with what they regard as necessary spending increases for
laudable projects. Neo-progressive Democrats regard restraints on spending as
destructive of what they regard as legislative oversight of state’s budgets.
“Even as Connecticut’s pension assets and fiscal reserves grow,”
largely as a result of guardrail allocations, “health care, social services and
higher education programs continue to erode,” according to CTMirror. While both Democrat leader of the
House of Representatives Matt Ritter and Democrat leader of the Senate Martin
Looney acknowledge that the guardrail system has captured nearly $11 billion in
surpluses since 2017, they fear “these guardrails could be out of balance,
damaging education, health care and social services if not carefully
monitored.” If surplus revenue acquired by spending guardrails is used to pay off
state debt, these funds naturally will not be available to pay for fixed cost
increases in state spending. This is an argument that may be used to forestall
any and all reductions in spending,
anytime, for any reason.
Republicans argue that left leaning Democrats like Looney, every
neo-progressive’s hero, have misdiagnosed the problem. State debt occurs when state
expenditures outpace the state’s Gross State Product (GSP), and there are only
two methods of redressing the balance: The state – meaning the state
legislature dominated by neo-progressive Democrats, constitutionally in charge
of both taxation and spending -- may either 1) increase taxes to cover deficits
or 2) decrease expenditures. Both 1 and 2, it need hardly be said, are politically
painful choices. Brute necessity is always an unforgiving taskmaster.
Fixed costs allow legislators in full flight from their constitutional
obligations to pawn off both spending and taxation further into the future by
means of lengthy state contracts that may only be adjusted by courts. Virtually
all state contracts are ironclad, the work of neo-progressive legislators who
wear their hearts on the sleeve of union bosses to whom they defer every time a
state contract is drawn up that marries union interests and the budgetary
responsibilities of state legislators. What the General Assembly has joined
together let no man tear asunder.
If borderless state spending and fixed costs are the problems,
Powell’s remedy – unfix fixed costs – is the proper solution to the problem.
The question at hand is: How would unfixing costs benefit the state –
i.e. the people of Connecticut, always to be distinguished from politicians
in full flight from their constitutional obligations?
Unfixing costs would return constitutional responsibilities to the
proper branch of government. It also would temper the budget-busting hold of
state unions on legislators dependent upon union political activity for their reelection
prospects.
Should the state legislature eliminate state worker contracts all
together and unilaterally decide, for prudential reasons, what salaries and
benefits state workers shall receive, consonant with the General Assembly’s constitutional
obligations -- every fiscal year.
That is how unfixing the predictable destructive consequences of
budget-busting fixed costs may be remedied. The proper answer to this question
may be difficult – indeed given the current dispersal of political power in
Connecticut to a single Democrat Party, entropy and political cowardice may
prevent a rational solution to the problem of overspending -- but there can be
no denying that this is the right answer to the question: How may the state
prevent uncontrolled budget sprawl?
You cannot arrive at a right answer by asking the wrong question.
And you cannot embrace constitutional responsibilities by shifting legislative
powers to the judiciary or to the
governor’s already swollen administrative apparat of experts and money
managers.
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