CT News Junkie

A Connecticut news site that understands the usual media offerings just…aren’t…enough.

Not Much Progress Made This Session On The Economy

by | May 9, 2014 3:57pm () Comments | Commenting has expired | Share
Posted to: Business, Labor, State Budget, Cromwell

Christine Stuart photo CROMWELL — The Connecticut Business and Industry Association’s vice president of government affairs told a group of business executives Friday that the business community had one win, one loss, and blocked a lot of “bad” bills during the 2014 legislative session.

Bonnie Stewart, CBIA’s vice president of government affairs, said they were successful getting the legislature to approve an apprenticeship tax credit for manufacturing companies. There are only about 150 individuals in apprenticeship programs outside of the ones run by the utilities or other trades. The measure was approved as part of the language implementing the budget.

While she only cited that one victory during her prepared remarks, Stewart said afterward that another victory was the workers’ compensation legislation, which changes how the default rates for workers’ compensation-related services are set.

But she admits that neither of those victories increases the state’s economic competitiveness. CBIA and its partners have created a campaign to move the state up in the national rankings. The goal is to reach 20th by 2017. Connecticut ranked 45th in the 2013 CNBC rankings.

The big loss this legislative session, according to Stewart, was the increase in the minimum wage.

“The increase in the minimum wage was a problem,” she said. “Most of Connecticut does not pay the minimum wage, but we did hear from a lot of our members that their wages for other employees are tied to the minimum wage.”

Stewart, who has been with CBIA for 26 years, said she had never experienced a volume of calls like the ones produced by the news that Democratic Gov. Dannel P. Malloy and the legislature wanted to raise the minimum wage to $10.10 an hour by 2017. Malloy signed the increase into law in late March, making Connecticut the first state to heed President Barack Obama’s call for the increase.

“It was a definite priority for the governor. It was something he wanted,” Stewart said.

Meanwhile, “we’ve got a huge problem when it comes to the state budget,” she said. “We’ve seen our revenues fall and there’s a huge deficit projected for two years out.”

She said all the gubernatorial candidates are saying they won’t raise taxes if they get elected, but “that means they have to get their spending under control.”

Traditionally, cutting spending is something “the legislature, to put it nicely, has a great deal of trouble with,” Stewart said.

Connecticut’s budget may be “balanced” but it doesn’t account for all the liabilities and debts the state has incurred over the years, Camille Murphy, the president of the Connecticut Society of Certified Public Accountants, said Friday.

“Folks, we’re in trouble,” Murphy said. “We’re in trouble with a capital T.”

Nationwide, states will need to report all pension and “other post employment benefits” on their financial statements starting in 2014. Connecticut has some of the highest unfunded pension and “other post employment benefit” liabilities in the nation.

In 2012, Connecticut’s State Employees’ Retirement System had $9.7 billion inassets, which is enough to cover 42.3 percent of its $23 billion in liabilities. The Teachers’ Retirement Fund had $13.7 billion in assets, which is enough to cover 55.24 percent of its $24.9 billion in liabilities.

At the moment, “we make promises today for people who work for the government and we don’t put those balances on the balance sheet,” Murphy said. “That all changes this year.”

Based on last year’s annual financial statement, Murphy calculated that if state government was shut down on June 30, but continued accepting revenue for 60 days there would be a $1.1 billion deficit.

“It doesn’t even make sense,” Murphy said.

When all the liabilities are accounted for under the “full accrual” method of accounting, there is a $15 billion working capital deficit on the balance sheet. Next, she wondered what it would look like if all the debt and all the promises the state made were on the balance sheet.

“If we did that we would have a $59 billion operating fund deficit,” Murphy said. “Do you think this is sustainable?”

She said everyone hopes things are going to get better and the economy is going to turn around, “but hope is not a strategy.”

Tags: , , , , , , , , ,

Share this story with others.

Share | |


(8) Archived Comments

posted by: Lawrence | May 9, 2014  6:17pm

So amusing. Over a billion dollars in bonding for First Five, small business express, and fully paid worker training and it’s never enough for the CBIA.

Meanwhile, the GOP ‘alternative budget’ runs up a $2 billion budget deficit over two years and Stewart still moans. 

Yes, spending is out of control, and so are deficits. Time to stop underwriting business costs in CT and demand that the Republicans submit a budget that cuts state spending by $2 billion and creates no future deficits.

Go to it, Bonnie.

posted by: dano860 | May 9, 2014  10:24pm

Ms. Stewart and Ms. Murphy it would be nice if our legislators and leaders would simply try to understand the “T"rouble we are in. I mentioned in another post that I don’t believe that there was one real, honest attempt to ‘get the spending under control’. Out of control is the norm in this State.
Like you said, strategy? Let’s try another suggestion box. It work before, right?

posted by: The Batman | May 10, 2014  4:47pm

The Batman

First Five! Lawrence, tell me, how many of companies actually cashed their corporate welfare checks? But hey, at least we’ve still got Back9. Am I right?

posted by: SocialButterfly | May 11, 2014  8:03pm

Shelton Mayor Mark Lauretti isn’t going anywhere with 3% of the Republican vote for Governor—and should drop out of the race to focus on being the Lieutenant Governor on the Tom Foley ticket—for an unbeatable Foley-Lauretti team Two very business achieving candidates the the people of Connecticut need in office desperately—to turn our failing state around to fiscal responsibility—and rescue Connecticut from complete fiscal incompetence.

posted by: Lawrence | May 11, 2014  8:39pm

Good or bad, it’s still CT taxpayer cash for businesses, right Batman?

And the CBIA wants more. Gobs and gobs and gobs and gobs more. And no regulation or accountability—- TRADE SECRETS! 

For example, those recent labor violations at the Amazon warehouse in Windsor? After the state and Windsor forgave/gave millions in tax breaks? To CBIA, that’s pro-business!

posted by: Commuter | May 11, 2014  9:47pm

At a minimum, in the interest of a balanced and properly informed discussion, the caveat in media reports (that insist on repeating the non-existent budget deficit projection) should note what Sec. Barnes told them - there is no budget yet for the next biennium, and the assumptions that the OFA are using are not consistent with the administration’s approach (and track record). Until Malloy and Barnes submit a budget that is out of balance, they certainly deserve the benefit of the doubt.

About the last thing we should do is listen to anything that Camille Murphy has to say on the subject. Her hyperbole is irritating and contributes nothing to the discussion. And she seems to be uninformed about what steps have already been taken to address the issues she is raising.

posted by: Hebee | May 12, 2014  7:24am

Is “Lawrence"really the pen name for Dan Malloy’s Mom? Blind loyalty is admirable in family but in politics, it usually shows an inability to think independently (Lawrence). “In places where everyone thinks alike, not much thinking is done.”

posted by: SocialButterfly | May 12, 2014  3:14pm

“No pun intended” by a writer who would like the Republicans to submit budget that Gov. Malloy and the controlling Democrats would approve that cuts $2 billion dollars in spending and create no future deficits. It’s almost as believable as our Governor’s desperate promise to cut taxes—if the voters’s are foolish enough to reelect him.

Social Networks We Use

Connecticut Network


Our Partners

Sponsored Messages