Is The State Budget Like A Household Budget?
by Hugh McQuaid | May 8, 2012 11:14pm
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Posted to: State Budget, Taxes, State Capitol
An argument over whether the state budget should be as simple a household budget highlighted ideological differences in the Senate on Tuesday as the chamber passed a bill closing deficits in both 2012 and 2013.
The bill adjusts the second year of the $40.11 billion budget in light of revenue projections that didn’t meet targets last month. The state discovered that revenue was about $150 million short in 2012 and $235 million short in 2013.
The Senate passed the bill with a 22-13 vote after nearly four hours of debate. The House voted 95-49 to approve the bill early Tuesday morning. The legislation will now head to Gov. Dannel P. Malloy’s desk.
Appropriations Committee Co-Chairwoman Sen. Toni Harp said lawmakers must consider much more than just balancing spending with revenue when they craft a budget.
“We often hear that the budget is like our budgets at home, but the reality is, the state budget is not like a household budget. The state budget is a budget that looks at the public good and takes care of the overall public good,” she said.
The state budget must address transportation infrastructure, public safety, education, the economy, as well as taking care of vulnerable populations, Harp said, adding that the budget Democrats presented was balanced without additional tax revenue by making cuts and finding money left on the table in the Medicaid fund.
Every state department, with the exception of the Education Department, will be forced to make cuts, Harp said. “It gives us an opportunity to look at what we really, really need to do as a state and what things are important to do. To have the departments become a little slimmer and a little more nimble and they’re not really happy. But the reality is that they can do it and we think this is a budget that we can grow upon as a state.”
However, Sen. Rob Kane, the ranking Republican on the Appropriations Committee, said he and Harp disagreed on how much the state should be reducing its spending as well as her dismissal of the household budget analogy.
“Citizens of the state of Connecticut, all 3.5, 3.6 million of them, have certainly tightened their belts in their own budgets,” he said. “I think everyone in this room has done that. I think small businesses have done that. I think everyone has done that over the last couple of years — except for state government.”
The state is the only entity “living in a fishbowl,” Kane said. Constituents wonder why the state government can’t tighten its own belt and with revenues declining the state should be cutting expenditures enough to offset it, he said.
“I think we have a spending problem. Members around this circle have even called it an addiction to spending,” Kane said.
Sen. Scott Frantz, R-Riverside, said in times of fiscal crisis the state budget must be run with the same discipline as a home budget.
“You simply can’t provide for your family, you simply can’t provide for the people, the people who so desperately need it,” Frantz said.
Republicans offered their own alternative to the budget through an amendment, which would have spent $208.5 million less than the bill that passed. The amendment would have eliminated or modified a number of Democratic policies unpopular with Republicans.
It would have repealed early release credits for inmates convicted of violent crimes. The amendment sought to freeze longevity payments for unionized state employees and eliminated them for all others. It proposed eliminating funding for the Citizens’ Election Program and transferred the money to the General Fund.
It would have also diverted state funding for the New Britain-to-Hartford busway to transportation infrastructure projects. The Republican budget amendment also would have ended the state Earned Income Tax Credit for the working poor that was passed last year.
Harp argued that the Republican budget made cuts in areas where the state either shouldn’t or can’t make cuts. For instance, the Republican amendment proposed cutting $82 million from the Department of Children and Families, but Harp said state spending on DCF is determined in part by court orders.
Harp said the amendment would have made it almost impossible for the state to maintain revenue by making additional cuts to the Department of Revenue Services.
“This budget is an interesting idea that absolutely doesn’t work, doesn’t take into consideration our [State Employee Bargaining Agent Coalition] obligations, our court-mandated obligations, and doesn’t take into consideration what we do as a state, which is enhance the public good,” Harp said.
However, Senate Minority Leader John McKinney said that unlike the Democrats’ budget, the Republican alternative actually spends less money than originally budgeted and funds the transition to Generally Accepted Accounting Principles.
Speaking to reporters earlier, Senate President Donald Williams said the GAAP transition always was supposed to be funded out of surplus. When last year’s budget passed, Republicans criticized it for having a built-in $1 billion dollar surplus. Many anticipated the state would have enough money to pay down the GAAP transition and start contributing to the Rainy Day Fund, he said.
“The economy has not come back as fast as it did after almost every other recession we have lived through,” Williams said. “In point of fact, we don’t have that billion dollar surplus that the Republicans predicted. We don’t have any surplus.”
The alternative budget was voted down 21-14 along party lines.
In their concluding remarks Republicans said the debate underlined the philosophical differences between them and the majority party. While the two parties found common ground on issues like pension and education reform, budgetary issues seemed to be firmly partisan territory.
McKinney criticized Malloy for employing the same budgetary gimmicks he condemned as a candidate. The budget takes $70 million from the Special Transportation Fund and diverts $222 million in funds previously designated to pay off borrowing the state did in 2009.
McKinney conceded it’s probably not possible to run the state like a business or family budget.
“But we can make the tough choices the hard working people across the state of Connecticut have been making every day during this economic recession, the worst of our lifetimes,” he said.
Williams defended the budget as an honest one that moves the state in the right direction.
“Will you be able to find at the edges of this budget areas where we could have done a little bit better here and there? Of course,” he said. “But compared to previous budgets submitted by Republican governors, this budget is about as good as it gets in times economic crisis.”
Tags: state budget, Toni Harp, Rob Kane, John McKinney, revenues, spending cuts, household, Senate, Hugh McQuaid, dh
(4) Comments
posted by: Noteworthy | May 9, 2012 3:26am
The only difference between a family budget and the state budget is the amount of line items. In the end, you still have to balance what you have in revenue vs. what you want to spend. That’s the common sense approach. Toni Harp and Don Williams and the Malloy don’t think that - they just take more from our family budgets to feed theirs. And it’s never enough. What’s worse, is there never are any efficiences, never any real cuts to spending and always, there are projects that are near worthless - Magic Bus and EITC - which are driven by absolutely nothing but either politics or idealogy not practical solutions to our problems, solutions that benefit the whole. Its sad.
posted by: Hoosier@CT | May 9, 2012 8:05am
Is it any wonder that we are in such a financial black hole. Sen. Toni Harp does not get it. When we say that the budget should be like a household budget, we mean that you cannot spend more than you make, not that you need to pay for groceries and utilities. When government looks at the financial books in a logical manner (and I mean the logic that the rest of us apply, not government logic) it should be a simple matter to make it balance between income and expenses.
